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The major U.S. stock indexes all declined around 0.5% to 1.0%, with the S&P 500 and NASDAQ both snapping a string of five consecutive weekly gains that had lifted the indexes to record highs. The Dow posted its second negative week in a row. Bill Walton passed away this week besides being one of the all time great basketball players, he was also well-known for his passion for the Grateful Dead. I have broken down this week’s update using Grateful Dead songs.

Friend of the Devil

The S&P 500 set out running, increasing nearly 5% in early May. Completely rebounding from an April decline and posting its sixth positive month out of the past seven. The NASDAQ led with a gain of almost 7%. Even the Dow added more than 2%, before a late-month decline sent that index down from its first-ever 40,000-point closing level reached on May 17. Don’t expect your market gains to vanish in the air. Pullbacks and volatility are a normal part of a bull market like the one we are in. The overall direction is still higher. What’s abnormal is we are almost halfway through 2024 and the only pullback we’ve had was the 5.5% decline in April. In the past 40 years the average bull market intra-year decline/pull back has been 10.1%. So don’t be shocked if we do experience a drawdown over the next few months, continue to hold and add to stocks if that drawdown occurs.

Ramble on Rose

OPEC+ (Organization of the Petroleum Exporting Countries and its allies) realizes that with the still historically low level of US oil reserves they are sitting plush with a royal flush. This morning they agreed to extend their oil production cuts. The official crude output agreement will continue into 2025. Reduced supply could mean higher oil prices. While energy prices are not part of the core inflation number that the Fed uses, it does have an impact on consumer spending and confidence. The good news this week was that core inflation is holding steady. The Personal Consumption Expenditures Price Index (the Fed’s preferred gauge) has now been stuck at 2.8% for three months in a row.

Touch of Grey 

The big news of the week was the felony conviction of former President Trump. This is an issue many of you feel passionate about and I fielded a good number of calls this week about my thoughts on how this will impact the market. My opinion hasn’t changed. Investors know that November’s election is a toss-up. The conviction probably makes a close race even closer. Normally, a close race creates uncertainty. Not really the case this time around as both candidates have already served a term as President and are known commodities. A second term for either Biden or Trump would have very little impact on the market as a whole. Where the election results will have an impact is on particular industries or even particular companies based on potential changes in tax, trade or regulatory policies. The economy performed well during both presidencies, outside the pandemic’s early months. Furthermore, stocks reacted favorably to both of their elections. Finally the conviction news did not trigger a massive move in stocks. Regardless of who wins, the bull market will get by, it will survive.

Reminder to my Federal Employee clients.  Laurel Wealth Solutions is sponsoring the upcoming Federal Executive Forum, June 12th in Washington D.C. The link is below. If you are interested in attending, my clients will receive a 20% discount on their registration fee using the discount code LWS20.

Contact Laurel Wealth Solutions if you’d like to speak about your investments or your plan. You can also reach Stephen Caruso directly by clicking the calendar link below and schedule an in person, phone, or zoom appointment at any time.