Welcome to the monthly market update from Midland Wealth Management. I am Dan Zeigler, Senior Portfolio Manager. Today, I wanted to spend a few minutes to give you an update on the markets for the month of June.

Market Returns

The stock market continued its trend higher in June as the S&P 500 is back towards all-time highs. For the month of June, the S&P 500 was up by about 3.50% and is now up over 15% for the year. Wow, what a first half! Artificial Intelligence, Nvidia, and technology stocks propelled the market in the first half. In fact, Nvidia has added over $1.8 trillion in market cap in 2024 and has made up close to 1/3 of the S&P 500 performance this year.

For the month of June, emerging markets were basically flat. However, they outperformed international developed markets, as the EAFE index was down close to 2% in June. Small-cap stocks lost ground in June, as well, with the S&P 600 index down close to 2.19% and as the index remains slightly negative for the year.

GDP

In the government’s latest GDP reading, annual growth was lifted sightly to a lackluster 1.4%, which was actually the smallest increase in nearly two years. Expectations for the 2nd quarter GDP is slightly higher at 2%.

Federal Reserve/Inflation/Interest Rates

The Federal Reserve’s next meeting is on July 31st and the market is expecting its key interest rates to remain unchanged. In September, the market is pricing in a 60% chance the Fed may look to cut interest rates by 0.25% from their current level of 5.25 – 5.50%.

Personal consumption expenditure (PCE), which is the Fed’s preferred inflation indicator, came in at 0.1% month over month (MoM), which was in line with market estimates. Over the past 12 months, both headline and core PCE increased by 2.6% year over year.

Outlook

The labor market remains strong with the unemployment rate at 4%. The U.S. employment report, which is due out on July 5th, is anticipating 195,000 jobs added to the economy and for the unemployment rate to remain stable at 4%. Personal income rose by 0.5% MoM in May, which was above the market expectations of 0.4% MoM.

Thanks for joining me for this month’s market update and be on the lookout for our quarterly newsletter.