What Happened Last Week

After consuming a fresh batch of economic data, stocks were mixed.

The Dow and S&P 500 were both down 0.08%, while the Nasdaq was up 0.24%.¹

Nasdaq Regains Lead

Last week opened with the S&P 500 and Nasdaq heading lower, while the Dow rallied on momentum from the prior week. But by mid-week, the leadership shifted with the Nasdaq pushing higher.²

With the back half of the week packed with fresh economic data, conflicting stories developed about the economy. New home sales fell 11.3 percent in May—the largest month-over-month drop in a year and a half—while the supply of new homes hit a 16-year high. Meanwhile, first-quarter GDP revised slightly to 1.4 percent higher, and durable goods increased in May.^3,4,5

Friday's personal consumption and expenditure (PCE) data showed that core inflation slowed to 0.1 percent in May over the prior month and 2.6 percent year-over-year—its lowest annual rate in three years. Both figures were in line with expectations. Stock prices initially rallied on the upbeat inflation news, but the early gains faded as the trading day progressed.⁶

^{Source: YCharts.com, June 29, 2024. Weekly performance is measured from Monday, June 24, to Friday, June 28.
TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.
Treasury note yield is expressed in basis points.}

Inflation And Rates

Progress has been made on inflation in recent months. However, Federal Reserve officials reminded us that it remains above their 2 percent target.

Last week, Fed Governor Michelle Bowman surprised the markets when she indicated, “I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse.” Fed Chair Powell, scheduled to speak on July 2, told investors on May 14, “I don’t think that it’s likely, based on the data that we have, that the next move that we make would be a rate hike.”⁷

Economic Data To Watch

Monday: ISM Manufacturing Index. Construction Spending.

Tuesday: Fed Chair Jerome Powell speaks. Motor Vehicle Sales. JOLTS.

Wednesday: Jobless Claims. International Trade in Goods and Services. FOMC Minutes.

Friday: Employment Situation. Fed Balance Sheet.

^{Source: Investors Business Daily - Econoday economic calendar;  June 25, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

Earnings Reports To Watch

Wednesday: Constellation Brands Inc. (STZ)

Friday: KalVista Pharmaceuticals, Inc. (KALV)

^{Source: Zacks, June 25, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

Think About Credits and Deductions Now to Prepare for Filing

Here are a few facts about credits and deductions that can guide you through your year-round tax preparation:

• Taxable income remains after someone subtracts any eligible deductions from their adjusted gross income, including the standard deduction. Some taxpayers may itemize their deductions to reduce their adjusted gross income.
• The Tax Cuts and Jobs Act changed itemized deductions. In comparing these changes, many individuals accustomed to itemizing may find it more beneficial to take the standard deduction.
• Generally, if a taxpayer’s itemized deductions are more significant than their standard deduction, they should itemize. Depending on the situation, some taxpayers may even be required to itemize.

Taxpayers can subtract tax credits from the total amount of tax they owe. To claim a credit, taxpayers should keep records demonstrating their eligibility. Some major tax credits include the child tax credit, the child and dependent care credit, the American opportunity credit or lifetime learning credit, and the earned income tax credit.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁸

Sources

^{1. The Wall Street Journal, June 28, 2024}

^{2. The Wall Street Journal, June 28, 2024}

^{3. CNBC.com, June 27-28, 2024}

^{4. AP News, June 27, 2024}

^{5. Reuters, June 26, 2024} 

^{6. CNBC.com, June 28, 2024}

^{7. CNBC.com, June 25, 2024}

^{8. IRS.gov, March 1, 2023}