Looking Back: In the week ending June 21st, the U.S. stock market and housing prices continued to hit all-time highs while consumer sentiment began to falter.

Equities: The U.S. markets rose, carried by continued strength in the Dow Jones Industrial Index (up 1.5%). European equities gained, led by the auto sector, while Asian markets remained mixed ahead of inflation data from Australia and Japan.

Bonds: Treasury yields held steady, with the 10-year yield around 4.3%. Market expectations suggest potential rate cuts later this year, as the Fed monitors inflation trends closely. The ECB recently cut rates, and the Bank of England maintained its rate at 4.5%.

Commodities: Commodity markets were volatile. Oil prices rose 3.3%, driven by geopolitical tensions and OPEC+ production decisions. Oil prices are up 12.5% this year. Gold remained stable, balancing its safe-haven status against a stronger dollar.

Economic Data: Recent economic data provides a mixed picture. Housing prices hit record highs nationally while credit delinquency rates rose, particularly for credit cards and auto loans. The University of Michigan consumer sentiment survey showed that individuals' optimism about the U.S. economy is at the lowest level in quite awhile.

Looking Forward: This week, the Fed’s preferred inflation measure, the core PCE, will be released on Friday. Expectations are for continued easing of inflation, which could lead to a higher probability of the Fed lowering interest rates later this year. Political events, including the first U.S. presidential debate and the French parliamentary elections, could introduce additional uncertainty into the markets. Volatility is expected to pick up heading into the U.S. election this fall. Historically, that’s been true (see below).

Here’s to navigating the markets with a steady hand and an optimistic outlook.

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