The S&P 500 index notched a fourth consecutive weekly gain on an improved economic growth outlook as investors look forward to the consumer inflation report and the Federal Reserve’s policy decision due this week.
The benchmark index ended Friday’s session up 0.4% from the previous week. Seven sectors posted gains for the week, all outperforming the headline index, while technology, consumer staples, communication services and health care posted losses.
The World Bank and the Organization for Economic Co-operation and Development this week raised their global and US gross domestic product growth expectations for 2023. The OECD left its global GDP growth outlook for 2024 unchanged, while the World Bank downgraded its projections.
US economic data showed the international trade deficit widened in April to reach its largest level in six months, while weekly claims for jobless benefits jumped to the highest reading since October 2021, indicating a potentially softening labor market. The Institute for Supply Management’s data showed a deceleration in services sector growth in May.
The Federal Open Market Committee is scheduled to announce its monetary policy decision Wednesday, with markets mostly projecting interest rates to hold steady, according to the CME FedWatch Tool. In a bid to combat inflation, the committee has lifted interest rates to their highest level since 2007, up from almost zero early last year. Bank of Canada announced a surprise interest-rate hike during the week.
Sector Performance
Consumer discretionary led the pack, up 2.4% on the week amid a 14% boost from Tesla (TSLA). General Motors (GM) will integrate the North American Charging Standard connector design, developed by Tesla, into its new electric vehicles starting in 2025.
Technology saw the steepest decline for the week, down 0.7%. Apple (AAPL) introduced its $3,499 Vision Pro mixed-reality headset at its Worldwide Developers Conference during the week, garnering mixed reviews from analysts.
Looking Ahead…
Key macro data due this week includes the producer price report for May, regional manufacturing prints from the Philadelphia Fed and the New York Fed, retail sales report for May, and the University of Michigan’s consumer sentiment survey.
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