Companies reported strong commercial momentum with over 77% exceeding earnings per share expectations and over 60% surpassing revenue forecasts in Q1 of 2024 reporting period
Fed Chair Jerome Powell indicated that a rate hike was not likely to be the committee's next move, suggesting an easing bias in 2024
Federal Reserve maintained funding costs for fed funds and projected rates will stay higher for longer but maintain an easing bias
Inflation increased by 2.7% from the same month last year but Federal Reserve has made progress in bringing it down over past few quarters
S&P 500 experienced a significant decline due to unexpectedly high inflation readings and speculation of interest rate hike in 2024
S&P 500 had its best weekly gain of the year, rising 2.67% from the previous week
SP500 rallied towards new all-time highs after FOMC meeting indicated easing bias in 2024
In recent weeks, the S&P 500 (SP500) experienced a significant decline due to unexpectedly high inflation readings and speculation of a potential interest rate hike in 2024. However, investors gained some relief after the Federal Open Market Committee (FOMC) meeting in April/May, during which Fed Chair Jerome Powell indicated that a rate hike was not likely to be the committee's next move. This suggests that there is an easing bias in 2024, and given this outlook, it is expected that equities will rally towards new all-time highs. The S&P 500 has seen its best weekly gain of the year, rising 2.67% from the previous week, ending a three-part streak of weekly losses. The U.S. Treasury's yields for the 10-year and 2-year notes are currently at 4.67% and 4.96%, respectively.
The Federal Reserve has maintained funding costs for fed funds in the range of 525-550 and projected rates will stay higher for longer, although they maintain an easing bias. The Fed's actions are aimed at controlling inflation while maintaining employment and inflation goals. Despite recent volatility, the S&P 500 has been above its 200-day moving average since November 3rd but below its 50-day moving average since April 15th.
Inflation has increased by 2.7% from the same month last year, but the Federal Reserve has made progress in bringing it down over the past few quarters. Companies are reporting strong commercial momentum, with over 77% exceeding earnings per share expectations and over 60% surpassing revenue forecasts in the first quarter of 2024 reporting period. The nonfarm payrolls report suggests that the economy is still rebalancing labor markets, moderating wage growth, and cooling inflation.
Wall Street's summer vacation plans have been disrupted by higher inflation and stock market volatility. The Federal Reserve's predicted interest-rate cuts have faded from view due to persistent inflation. Investors' summer vacations may be canceled as they focus on the ongoing situation in the market.
The article mentions that the Federal Reserve has made progress in bringing down inflation, but it does not provide specific data on the current rate of inflation or how much it has decreased since its peak.
The article states that over 77% of companies exceeded earnings per share expectations and over 60% surpassed revenue forecasts in Q1 of 2024 reporting period, but it does not provide a source for this information.
Wall Street's summer vacation plans have been disrupted by higher inflation and stock market volatility.
The Federal Reserve's predicted interest-rate cuts have faded from view due to persistent inflation.
Accuracy
The S&P 500 has slipped 0.2% since March and the Nasdaq is down 0.7% due to potential higher rates.
Deception
(50%)
The author expresses her opinion about the cancellation of Wall Street's summer vacations due to stock market volatility and inflation. She uses emotional manipulation by implying that investors were promised a 'nirvana' situation with rate cuts and high profits, but now face uncertainty. The article also engages in selective reporting by focusing on the negative impact of inflation and higher interest rates without mentioning any potential positive effects.
But inflation proved stickier than expected, and those interest-rate cuts started to fade from view.
As the hope for cuts faded, the performance of major stock indexes has become decidedly ‘meh.’
That means Wall Street’s fantasies of decamping to the Hamptons...
Wall Street’s summer is canceled, too.
Fallacies
(85%)
The article contains an appeal to authority and a potential false cause fallacy. The author quotes Justin Simon, a portfolio manager at Jasper Capital, as part of their argument about the expectations for interest rate cuts. This appeal to authority undermines the quality of the analysis. Additionally, there is an example of inflammatory rhetoric with phrases like 'cruel summer' and 'canceled', which are used to create a sense of urgency and fear around the stock market situation.
Wall Street's summer of worry
This isn't what we were told we were signing up for, that's for damn sure.
The combination would put the Federal Reserve on a glide path to cut interest rates — a move that would reduce the cost of debt, push stocks higher, and make consumers feel richer.
The nonfarm payrolls report suggested that the economy is still rebalancing labor markets.
Employers added 175,000 jobs last month, the smallest increase in six months.
The unemployment rate ticked up to 3.9%.
Accuracy
The three-month annualized pace of average hourly earnings growth slowed to 2.8%
Wall Street’s summer vacation plans have been disrupted by higher inflation and stock market volatility.
Investors were expecting healthy corporate earnings, strong household consumption, and a defeat of high inflation in 2024.
The Federal Reserve’s predicted interest-rate cuts have faded from view due to persistent inflation.
Deception
(100%)
None Found At Time Of
Publication
Fallacies
(95%)
The author makes several statements that are factual and do not contain any logical fallacies. However, there is one instance of an appeal to authority when the author states 'Now, let’s just hope this continues.' This statement implies that the data reported by the Bureau of Labor Statistics is a reliable indicator for the future state of the economy. While it is true that economic data can provide valuable insights, it does not guarantee future outcomes.
The S&P 500 (SP500) has tumbled over the past few weeks due to hotter-than-expected inflation readings and speculation for a potential rate hike in 2024.
Fed Chair Jerome Powell indicated that a rate hike is unlikely to be the committee's next move, suggesting an easing bias in 2024.
The Fed maintained funding costs for fed funds in the range of 525-550 and projected rates will likely stay higher for longer.
Inflation has increased by 2.7% from the same month last year, but the Fed has made progress in bringing inflation down over the past few quarters.
Companies are reporting strong commercial momentum, with over 77% exceeding earnings per share expectations and over 60% surpassing revenue forecasts in the first quarter of 2024 reporting period.
Accuracy
]The S&P 500 has tumbled over the past few weeks due to hotter-than-expected inflation readings and speculation for a potential rate hike in 2024.[
Fed Chair Jerome Powell indicated that a rate hike is unlikely to be the committee’s next move, suggesting an easing bias in 2024.
Markets agree with the view that rates are poised to be cut in 2024, with around 40% expecting one rate cut and approximately half of market participants expecting more than one cut.
The S&P 500 had its best weekly gain of the year, rising 2.67% from the previous week.
, The index ended a streak of three consecutive weekly losses.
The U.S. Treasury’s yields for the 10-year and 2-year notes are currently at 4.67% and 4.96% respectively.
The S&P 500 reached an all-time high on October 9, 2007 at 1565.15 and dropped ~57% during the Global Financial Crisis to close at 676.53 on March 9, 2009.
The S&P 500 has been above its 200-day moving average since November 3rd, but below its 50-day moving average since April 15th.
Accuracy
As of April 26th, the closing yield on the US Treasury’s 10-year note was at 4.67%, above its record low of 0.52% on August 4, 2020.
Deception
(100%)
None Found At Time Of
Publication
Fallacies
(95%)
No ad hominem, ad populum, or false dilemma fallacies were found. There are some instances of hasty generalizations in the historical charts and data used to draw conclusions about future performance. The author also uses inflammatory rhetoric when referring to the 'Global Financial Crisis' and recent selloffs in 2022 without providing context or analysis beyond labeling them as such. Additionally, there are appeals to authority through the inclusion of ETFs associated with Treasuries and S&P indices, but these are not fallacies as they are providing relevant information for investors.
. . .the index is currently up 7.53% year to date and now sits 2.94% below its record close from March 28, 2024.
Here is a snapshot of the index over the past 5 days:
