10 Things You Need to Know: June 18, 2024
Key data releases this week include: retail sales (Tue), industrial production (Tue), NAHB Housing Market Index (Wed), housing starts (Thu), existing home sales (Fri), and leading economic indicators (Fri).
Haver
June 12, 2024
The Consumer Price Index was unchanged during May (3.3% y/y) following a 0.3% April rise and two consecutive 0.4% increases. A 0.1% rise had been expected in the Action Economics Forecast Survey. Prices excluding food & energy increased 0.2% last month after rising 0.3% in April. Core consumer prices rose 3.4% y/y compared to 3.9% during all of last year.
Haver
June 13, 2024
The Producer Price Index for final demand declined 0.2% (+2.2% y/y) during May after rising an unrevised 0.5% in April, according to the Bureau of Labor Statistics. A 0.1% gain had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy held steady (+2.3% y/y) after rising 0.5% in April. A 0.3% rise had been expected.
Capital Economics
June 14, 2024
It is difficult to know how radical (or reckless) France’s next government will be on fiscal policy, but the risks to France’s public finances have certainly risen since the snap election was called. Meanwhile, although there has been an increase in spreads on bonds of other euro-zone governments, for now the risks of a systemic problem seem low.
Bloomberg
June 17, 2024
China’s central bank left a key interest rate steady for the tenth straight month, displaying caution on monetary easing given abundant liquidity and the pressure to prevent the yuan from weakening further. The People’s Bank of China kept the rate on one-year policy loans, the so-called medium-term lending facility, steady at 2.5% on Monday. It withdrew a net 55 billion yuan ($7.6 billion) from the banking system to avoid excessive liquidity.
WSJ
June 17, 2024
The Bank of Japan is expected to reduce its monthly bond purchases by around 2 trillion yen ($12.7 billion) while delaying interest rate hikes until at least September, according to former board member Makoto Sakurai. The BOJ’s decision to announce its bond-tapering plan in July has created uncertainty about the timing of rate hikes, with the next increase likely in autumn or early next year.
FT
June 14, 2024
Despite election-related volatility in countries like India, Mexico, and South Africa, the long-term outlook for emerging markets remains positive. Structural reforms, fiscal discipline, and flexible exchange rate regimes have helped emerging markets mitigate risks and attract investment, and successful bond issuances and oversubscription indicate strong investor confidence.
Barron’s
June 17, 2024
Just five stocks— Nvidia, Meta Platforms, Alphabet, Microsoft, and Amazon.com —have accounted for 61% of the S&P 500’s returns this year.
CFA Institute/ Barron’s
June 17, 2024
Our survey found that Gen Z is comfortable taking substantially more financial risk than previous generations were. In fact, they believe it’s necessary, with half of them saying they were comfortable taking significant financial risks to achieve their wealth goals. They told us they thought taking those risks was necessary because they believe the economic conditions they face were more challenging than any time in history.
FT, WSJ, AP
June 12, 2024, June 12, 2024 , June 12, 2024
Federal Reserve officials left interest rates unchanged at the end of a two-day meeting, and their median projection suggests that there will be only one rate cut in 2024. However, their projections also call for four rate cuts in 2025. The officials said that there has been “modest further progress” in bringing inflation back toward the central bank’s 2% target.