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Money Monday: Tech Carrying the Market, Stagnating Economy

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Today is Monday, June 17th, 2024, and here’s our Money Monday Market Brief.

The S&P 500 soared last week to record highs. It’s been quite a ride for the stock market, with Nvidia and a few other tech giants propping up the market. Across the board, from the financial sector to industrial services, the market has been taking hits. Holders of tech-heavy ETFs have been riding along just fine, but investors in energy and retail have been hurting over the last month.

The strong performance of tech giants like Nvidia contrasts sharply with the struggles in the financial, industrial, energy, and retail sectors. This divergence can lead to a lopsided economic recovery where some sectors thrive while others lag, potentially creating imbalances in the broader economy. For example, the tech sector’s resilience can drive innovation and productivity, but the underperformance of the energy and retail sectors can signal underlying weaknesses in consumer demand and traditional industries.

The struggles in the retail sector may reflect changing consumer behaviors and inflationary pressures. As inflation impacts purchasing power, consumers may shift their spending patterns, affecting retail sales and the overall economic outlook. Additionally, the energy sector’s challenges could influence energy prices, affecting both consumer costs and industrial production expenses.

Last week, the Federal Reserve held rates steady and announced the possibility of one rate cut this year at their FOMC meeting on Wednesday. This decision comes as inflation cooled slightly after the CPI report showed a fractional dip in last Wednesday’s May inflation report.

Another initial jobless claims report is set to be released this Thursday as the Fed continues to look for a cooling job market. It’s a crucial indicator that the Fed is closely monitoring as they navigate interest rates in the coming year and the impact they have on housing, lending, and spending.

In earnings news, Chesapeake Energy, Southwestern Energy, MetLife, and Mastercard all have earnings calls scheduled for tomorrow.

In other news, Boeing is in the spotlight again. Another 737 Max experienced issues when a Southwest flight was forced into a Dutch Roll, resulting in a detour and unscheduled landing. Safety concerns continue to plague the aircraft model.

The United States’ International Development Finance Corporation, or DFC, has announced the approval of $412 million in financing and political risk insurance for a 126.5 Mega Watt West Africa LNG/combined cycle power plant project. This investment highlights the ongoing efforts to support energy infrastructure development in West Africa.

In crypto news, altcoins continue to tumble following a sell-off that started earlier this month. However, Bitcoin continues to hold above $60,000, and Ethereum has bounced back to the $3600 range, showing some resilience in the volatile market.

You can find charts, data, tables, and much more on the Fraywire Market Portal for free

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