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Hope you are all doing well. Happy Mother’s Day! U.S. stock indexes rose for the third week in a row as earnings season wound down, with the S&P 500 adding around 2% and the NASDAQ rising about 1%. The recent gains leave the indexes slightly below the record levels they achieved prior to a market pullback in the first half of April. I have broken down this week’s update using quotes from Brady Bunch mom, Carol Brady.

No problem was ever solved by crawling into a hole. – Carol Brady

The inflation problem is not going away and consumers are looking for a hole to crawl into. U.S consumers expect the inflation rate to rise rather than fall. The recent trend of higher-than-expected inflation numbers appears to be weighing on U.S. consumer sentiment. It fell sharply. The University of Michigan’s sentiment survey for May posted a preliminary reading of 67.4, down from 77.2 in April. Some of the best rallies in the stock market come when people are most pessimistic and fleeing for safety.  Corporate earnings have been great even with the higher inflation. Therefore, the negative sentiment reading should not be viewed as a harbinger of a pending stock decline.

You shouldn’t put down a loser, Cindy, because you might be one yourself someday. – Carol Brady

Losing may be a good thing when it comes to the labor market. New filings for unemployment benefits rose to the highest level in more than eight months. The latest weekly update from the U.S. government recorded about 231,000 unemployment claims, up from 209,000 the prior week. The results follow a recent slowdown in U.S. jobs growth. The number could  indicate that economic growth and the labor market might be softening.  In terms of the stock market the numbers need to be viewed through the lens of the Fed. A slower but still growing economy is perfect for stocks. An economy growing around 2%, could help bring down inflation towards the Fed’s target and bring us closer to rate cuts, which is what the market really wants.

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.