Last week, stocks rallied but closed short of their all-time highs. May’s Retail Sales Report showed a 0.1% increase from the previous month, below the 0.3% expected. The category of sporting goods, hobby, musical instruments, and book stores saw the biggest m/m increase of 2.8%. In contrast, gasoline stations and furniture sales saw the largest decreases, 2.2% and 1.1% respectively. Look for summer-time discounts on home furniture and furnishings.
This week, we expect a m/m decrease in May’s Personal Consumption Expenditures (PCE). PCE is the preferred inflation gauge for Fed rate decisions. Lower PCE would help the case for a summer-time Fed rate cut. The current probability of a .25% September rate cut is 61.1%. What could a rate cut do for you? If you have a $100,000 Home Equity Line of Credit balance at the prime rate of 8.5%, a .25% rate cut saves you approximately $21 a month.
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Here’s to a great week ahead!
Thank you,
David Bennett