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Weekly Economic Update: Stocks and Inflation

Presented by Nicholas Wealth Management

June 14th , 2021


Weekly Market Update

In this week’s recap: Stocks kept cool, even as inflation came in hot.


The Week on Wall Street

Stocks ended the week mixed as investors appeared to shrug off a hotter-than-expected inflation report.

The Dow Jones Industrial Average slipped 0.80%, while the Standard & Poor’s 500 advanced 0.41%. The Nasdaq Composite index led, tacking on 1.85%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.31%.1,2,3


Another Quiet Week

The market traded in a narrow range for much of last week as investors anxiously awaited the release of the Consumer Price Index (CPI) on Thursday.

May’s CPI saw an increase in inflation that exceeded most expectations. Paradoxically, markets advanced on the news, sending the S&P 500 to a new record close and the technology-heavy NASDAQ Composite higher. Perhaps equally unexpected was the decline in the 10-year Treasury yield, which slipped to 1.45%, touching its lowest level in three months.4

On Friday, stocks were unable to materially build on the previous day’s advance, though the S&P 500 managed to add onto its record Thursday close.


Inflation Trends

Consumer prices headed higher in May, rising 0.6% from April and by 5.0% from a year ago. It was the largest jump in the CPI since August 2008. Core inflation, which excludes food and energy prices, rose 3.8% — the sharpest increase in nearly three decades.5

Automobile prices were one of the primary contributors to May’s number. Used car and truck prices jumped 7.3% month-over-month and by 29.7% from a year ago. New cars experienced their highest monthly increase since October 2009 as a result of an inventory shortage stemming from tightness in the semiconductor supply.6



Tip of the Week

Arranging a student loan? Make sure that your child is fully committed to getting a degree. Dropping out or intermittently attending college can mean carrying debt for years without the economic power to pay it off.


Media

https://url.us.m.mimecastprotect.com/s/B2acCW60j7tz249tpADD9L?domain=youtu.be
Over the past year, many workers have been getting paid to not work. Now employers are having a tough time getting workers back on the job. David Nicholas joined Fox Business' David Asman on Monday 6/14, to discuss why the psychology of entry-level workers must change or input costs will continue to increase.

Be sure to subscribe to our YouTube page for all of David’s media commentaries CLICK HERE!



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CITATIONS:

1. The Wall Street Journal, June 11, 2021

2. The Wall Street Journal, June 11, 2021

3. The Wall Street Journal, June 11, 2021

4. The Wall Street Journal, June 11, 2021

5. CNBC, June 10, 2021

6. CNBC, June 10, 2021