Market Perspective for April 28, 2024

The final full week of April saw a variety of impactful new releases that will likely shape fiscal policy over the next several months. The first major release came out on Tuesday when the Flash Manufacturing PMI and Flash Services PMI figures were made public. Manufacturing came in at 49.9 percent while services came in a 50.9 percent, which were both below expectations.

It was believed that each of these indexes would come in at 52 percent prior to their release. On Wednesday, durable goods orders data revealed that core durable goods orders had increased .2 percent on a monthly basis. Meanwhile, all orders were up 2.6 percent over that same time period, which beat expectations of a 2.5 percent increase and were nearly double last month’s figure of 1.3 percent.

On Thursday, advance gross domestic product (GDP) data for the first quarter of 2024 was released. It found that the economy grew 1.6 percent over the first three months of the year, which was below the expected 2.5 percent growth and was well below the 3.4 percent rate of growth over the final quarter of 2023.

Also on Thursday, unemployment claims data came out and revealed that 207,000 people had requested benefits over the past seven days. This compares to an expected 214,000 claims prior to the news breaking.

Finally on this day, pending home sales data was released, and in the last month, such sales increased by 3.4 percent. This was compared to an expected growth rate of .3 percent and was nearly double last month’s figure of 1.6 percent. An increase in the number of home sales may indicate that there is a greater willingness to sell, which could help balance supply and demand pressures. Ultimately, this could lead to a moderation in housing prices that has been a major contributor to inflation.

On Friday, the Core PCE Index showed that prices changed by .3 percent over the last month. This was in line with expectations and in line with last month’s figure. Although the data shows that the economy is still running hotter than expected, many believe that the figure shows that overall conditions may not be as bad as they seem.

Finally, the University of Michigan released its revised consumer sentiment and inflation expectation figures for the latest reporting period. Consumer sentiment came in at 77.2 while it was expected that inflation will be at 3.2 percent a year from now.

The S&P 500 was up 2.36 percent this week to close at 5,099. It would make its low of the week on Monday morning when it dipped to 4,971 about an hour after the opening bell sounded. It would make its high of the week on Friday afternoon when it hit 5,113.

The Dow was also up more than 200 points to close at 38,239 for the week. This represented a gain of .56 percent over the last five trading days and was buoyed largely by a strong move on Friday that saw the index gain more than 153 points. On Tuesday, the market made its high of the week at 38,337 and made its low of the week on Thursday when it hit 37,769.

Finally, the Nasdaq would gain 550 points to finish at 15,927, which was a gain of 3.5 percent for the week. The index hit its weekly low of 15,281 on Monday morning while it hit its high on 15,971 on Friday.

In international news, the Bank of Japan (BOJ) decided on Thursday night to keep the country’s interest rate at .10 percent. However, it was said that rates could continue to go up if economic conditions led to more inflation. Australian authorities on Tuesday night revealed that inflation ticked up to 1 percent on a quarterly basis and 3.5 percent on an annual basis. In Canada, retail sales were down by .1 percent on a monthly basis, which was below expectations of a gain of .1 percent.

Next week will feature a number of news releases including the ADP and BLS nonfarm payroll change figures. It’s believed that the economy added 243,000 jobs during the last month, and it’s also believed that the unemployment rate will remain unchanged at 3.8 percent. In addition, the Fed will make a rate decision on Wednesday. It’s expected that it will remain at 5.5 percent.

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