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Hope you are all doing well. The NASDAQ set a record high on Tuesday and the S&P 500 and Dow followed suit the next day, lifted by fresh data on inflation and a brighter outlook for eventual interest-rate cuts. On Friday, the Dow closed above the 40,000-point mark for the first time, finishing at 40,003.6 and capping its fifth positive week in a row. The Preakness Stakes was yesterday as such I have broken down this week’s update using the names of Preakness winners.

Seize The Grey – 2024

For the last two months Gold has been taking full advantage of the market conditions. The price of gold futures on Friday climbed above the record-high $2,400-per-ounce level. Year to date, gold has risen nearly 17%, with most of the gain coming since mid-March. The charge forward gold comes as inflation is in a bit of a gray area. We are getting somewhat mixed numbers. In April, the Consumer Price Index rose 0.3% over the previous month and 3.4% over the same month a year earlier. That was better than expected and interrupted the recent trend of hotter-than-expected inflation data.

Lookin At Lucky – 2010

Stocks hit a record high again last week. The market does not typically go up without a pause or pull back, so I would not be shocked if a 5-10% correction happens over the summer. As I have been saying, that should be viewed as a buying opportunity. I believe the market is ultimately headed higher. It is common for stocks to extend gains after surpassing prior peaks. For example, the market hit a new peak in August 2020 and returned another 45% before hitting the peak of the previous bull market in January 2022. It is not luck that has been driving the economy, labor market and stock market. It is the demographics. Demographically, we are in a very similar spot to where we were when the market returned to a peak in November 1982. That bull run added another 185% before coming to an end. 1982 is a very good reference point because that is when a large wave of baby boomers started turning 35. Statistically your most productive earnings years come between the ages of 35 and 55. We have 10,000 millennials turning 40 each day. By the 2030s and 2040s the largest cohorts will be in their late 30s to early 50s. That should bode well for stocks long term just as it did in the 80s and 90s when the majority of baby boomers were in their most productive earnings years.

Red Bullet – 2000

China has been plagued by slumping housing prices, The real estate sector once accounted for as much as 30% of economic activity in China. All the bad news in real estate triggered a sense of urgency and on Friday China fired a policy bullet. The sweeping measures are designed to lift the struggling commercial and residential property markets in the world’s second-largest economy. China’s central bank reduced the minimum down payment for mortgages and removed the floor on interest rates for first and second homes. The Chinese central bank is also encouraging commercial banks to support local state-owned enterprises to buy unsold homes and turn them into social housing. The 300 billion yuan provided by the central bank could eventually underpin an estimated 500 billion yuan ($69 billion) worth of credit to support such purchases.

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.