Week of June 1, 2021
Another solid performance on Wall Street last week, with the Dow posting a gain of 0.9% and 1.9% for the month of May, making its fourth monthly gain in a row. The S&P 500 gained 1.2% on the week and 0.6% in May, also making its fourth straight advance. The tech-heavy NASDAQ gained 2.1% last week but declined 1.5% for the month.
Despite signs of inflation being on the rise, enthusiasm over the reopening of the economy has the U.S. equity markets looking for a strong start to the month of June. As local economies lift COVID restrictions, we should see business make every effort to return to life as it was pre-shutdown. The 1st quarter’s 6.4% GDP is expected to continue and may reach the 9% level before year’s end.
In an effort to curb rapid inflation, the Federal Reserve may soon be taking measures to reduce its monthly purchase of securities in the open market. The Fed had previously pumped money into the economy in an attempt to minimize the damage from the COVID-related closures. As signs of growing inflation continues, the Fed is walking a fine line between healthy economy growth and rapid inflation.