The stock market rebounded on Friday after news on improving consumer outlook on inflation. University of Michigan reported that consumers’ inflation expectations were much better in late May. It declined to 69.1 and beat expectations, but fell on a monthly basis.
Overall, S&P 500 rose 0.7% to 5,305, while NASDAQ grew 1.1% to 16,921.
Tweet of the Day
IF Bank of America got this call right, and IF the spread (262 bps) stayed unchanged, the average 30-year fixed mortgage rate would fall to 5.87% https://t.co/85BKNOSV1O
— Lance Lambert (@NewsLambert) May 17, 2024
Chart of the Day
Here is the ten-year chart of Pepsico (PEP) as of May 9, 2024, when the stock was at $178.
PepsiCo’s performance last quarter was a mixed bag. The company achieved 7% profit growth on only 2% revenue growth. The Quaker Oats division reported -24% sales growth due to product recalls. The recall was in December 2023 and was due to salmonella. Pepsico intends to close that facility, which is located in Illinois.
Management stated that slow revenue growth was also due to tough comparisons from a year ago when revenue grew 10%. During the past few years, Pepsico was a big beneficiary as the company marked up prices of drinks and snacks. Profits grew 13% in 2021, 8% in 2022, and 12% in 2023. Now those days are over, and PEP seems like a 7% grower again.
PEP is a core holding in the Conservative Growth Portfolio.
