Week of June 28, 2024 Weekly Recap & The Week Ahead
“The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological. Investor”
― Howard Marks
1. US Consumer Confidence Declines on Weaker Outlook for Economy — The Conference Board’s gauge of sentiment decreased to 100.4 from a downwardly revised 101.3 reading in May, data out Tuesday showed. The median estimate in a Bloomberg survey of economists called for a reading of 100.
June’s measure of expectations for the next six months fell nearly 2 points to 73, while present conditions increased from a downwardly revised May reading. Confidence has been subdued over the past few years as consumers contend with a higher cost of living, elevated borrowing costs and, more recently, a softening in the labor market. Only 12.5% of consumers expect business conditions to improve in the next six months, the smallest share since 2011.
2. McDonald’s Says Plant-Based Test Didn’t Pan Out in US — A test of its McPlant burger in San Francisco and Dallas “was not successful in either market,” Joe Erlinger, the chain’s US chief, said at the Wall Street Journal’s Global Food Forum in Chicago. That test wrapped up in 2022, the company said following the remarks. Instead of plant-based options, McDonald’s is investing in its chicken offerings as consumers lean toward that protein. The company sells more chicken than beef these days, he added.
3. GDP growth at slowest since 2022 — the American economy expanded at a 1.4% annual pace from January through March, the slowest quarterly growth since spring 2022, the government said Thursday in a slight upgrade from its previous estimate. Consumer spending grew at just a 1.5% rate, down from an initial estimate of 2%, in a sign that high interest rates may be taking a toll on the economy. The Commerce Department had previously estimated that the gross domestic product — the economy’s total output of goods and services — advanced at a 1.3% rate last quarter. After growing at a solid annual pace of more than 3% in the second half of 2023, consumer spending decelerated sharply last quarter. Spending on appliances, furniture and other goods fell by a 2.3% annual rate, while spending on travel, restaurant meals and other services rose at a 3.3% rate.
4. Slowing U.S. Inflation Fuels Expectations of Interest Rate Cuts — The core Personal Consumption Expenditures Price Index, which excludes volatile energy and food prices, increased 2.6% from a year ago, slowing from April’s 2.8% pace. The reading met the consensus of economists surveyed by The Wall Street Journal.
Core PCE inflation rose 0.1% in the month, compared to a 0.2% increase in April. The headline 12-month reading was 2.6%, slowing from April’s 2.7% pace. In the month, the PCE was flat after rising 0.3% in April, marking the first time consumer prices didn’t go up in six months. June PCE inflation is due July 26, just ahead of the next rate-setting Fed meeting on July 30- 31.
The week ahead — Economic data from Econoday.com:
