Equities seemed to ultimately shake off a poor GDP report and higher rates for longer concerns.
Markets have been reeling ever since the Fed first floated the idea of fewer rate cuts and a delay in the first cut. Despite a 1st quarter GDP number that came in well below the expectation (+1.6% vs +2.9%), equities were able to turn in a positive week for the first time in 4 weeks. While the headline GDP is expected to be revised higher (according to Treasury Secretary Yellen), the Fed’s games of double-speak have caught up to them.
This week’s FOMC meeting and press conference will go a long way to determining where we go from here.
Meanwhile, the consumer, job market, and general economic conditions are sound. The Fed’s own National Financial Conditions Index points to “loose” financial conditions. You will hear a lot about the “Sell In May” investment moniker. However, the data shows that it’s not a winning investment strategy historically. Expect some choppy trading this week with tech earnings, Fed speak, and the Jobs Report.
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