Economic and Market Update: Week Ending April 29th, 2024

TL;DR: Economic uncertainties persisted as inflation fears impacted markets. Stocks rebounded, mortgage rates stabilized, and existing-home sales dipped slightly. Companies like Apple and Amazon reported positive updates, while Tesla saw a surge in its stock following regulatory news in China.

This week, the focus remained on interest rates as inflation concerns persist. With inflation on the rise since the start of the year, hopes for a Fed rate reduction have dimmed. Several Fed members’ comments have left investors speculating about the possibility of any interest rate cuts this year. The initial estimate of the first quarter U.S. GDP showed a sluggish growth rate of just 1.6%, its slowest pace in two years, falling short of economists’ expectations of a 2.5% increase. In a twist, the “core” Personal Consumption Expenditures index (PCE) surged by 3.7% in the first quarter, surpassing economists’ expectations and indicating a significant inflation pickup. However, the core PCE index for March provided some relief, showing a 2.7% year-over-year increase, slightly up from February’s 2.5% rise but lower than the first quarter’s alarming growth rate. Treasury bond yields eased, and stocks rebounded on Friday, closing the week higher.

• Stock Markets: The Dow Jones Industrial Average closed at 38,239.66, up 0.7% from last week, with a year-to-date increase of 1.5%. The S&P 500 closed at 5,099.96, up 2.7% from last week, showing a year-to-date increase of 6.9%. The Nasdaq closed at 15,927.90, up 4.2% from last week, with a year-to-date increase of 6.1%.
• U.S. Treasury Bond Yields: The 10-year treasury bond closed yielding 4.68%, up from 4.62% last week. The 30-year treasury bond yield ended the week at 4.78%, up from 4.72% last week.
• Mortgage Rates: Freddie Mac reported that the 30-year fixed mortgage rate was 7.17%, up from 7.10% last week. The 15-year fixed rate was 6.44%, up from 6.39% last week.
• U.S. Existing-Home Sales: The National Association of Realtors reported that existing-home sales totaled 4.19 million units on a seasonally adjusted annualized rate in March, down 3.7% from March 2023. The median price for a home in the U.S. in March was up 5.7% from last March, with a 3.2-month supply of homes for sale.

Daily Mortgage Rates for April 29, 2024: Mortgage rates stabilized ahead of the Federal Reserve’s policy committee meeting, with the current average rate for a 30-year fixed mortgage at 7.32% for purchase and 7.33% for refinance. Rates on a 15-year mortgage stand at an average 6.75% for purchase and 6.80% for refinance.

Top 10 Things to Watch Monday, April 29:

• U.S. stocks higher as S&P 500 and Nasdaq break losing streaks.
• A key week for earnings, with 12 stocks in the Investing Club portfolio reporting, including Amazon.
• Apple shares jump to a one-month high ahead of earnings.
• Fed rate decision and monthly employment report on the horizon.
• Amazon reports faster deliveries and cost-cutting measures.
• Speculation mounts about Amazon declaring a dividend.
• Tesla shares surge after regulatory clearance for driver-assistance software in China.
• American Airlines cuts some lines due to Boeing’s delivery delays.
• GE Aerospace sees price target hikes after strong quarter.
• GE Healthcare reports earnings before the bell Tuesday.

Stock Market Today: U.S. stocks edge higher, Treasury yields and the dollar ease, as investors await key economic data, corporate earnings, and the Federal Reserve rate decision.