John Hancock: Weekly Market Recap Week Ended June 14

Fed stays the course

For its seventh meeting in a row, the U.S. Federal Reserve on Wednesday kept its benchmark interest rate unchanged. While Chair Jerome Powell said a monthly inflation report released earlier in the day was better than expected, the latest Fed projections suggest the possibility of just one interest-rate cut this year, down from the three cuts that the Fed had projected as recently as March. 

Growth’s dominance

Fueled in part by technology stock gains and enthusiasm over artificial intelligence, a U.S. large-cap growth index again outperformed its value counterpart by a wide margin, extending the growth style’s year-to-date leadership. Over the past four weeks, the growth index has gained around 6.0% versus a 3.3% decline for the value benchmark. 

Inflation easing

A monthly inflation reading only slightly beat expectations, but it was enough to help fuel stock market gains on Wednesday and lift prospects for a possible interest-rate cut in coming months. The Consumer Price Index recorded no change in May relative to the previous month; on a 12-month basis, May’s inflation figure was 3.3%, better than economists’ forecasts for 3.4%.

Sentiment sours

Inflation’s persistence appears to be weighing on U.S. consumers, as a measure of consumer sentiment fell to the lowest level in seven months. Friday’s preliminary reading from the University of Michigan’s sentiment survey fell to 65.6 from 69.1 in May. Survey participants’ inflation expectations rose slightly. 

Source: https://wmr.jhinvestments.com/