Market Perspective for March 24, 2024

On Wednesday the Federal Reserve announced its March rate decision. As expected, the Fed kept interest rates steady in a range between 5.25 percent and 5.5 percent.  Of course, the rate announcement itself wasn’t what the market was eager to hear. Instead, it wanted to learn from Fed Chair Jerome Powell and hear what he had to say about the future of interest rate cuts. According to Powell, the Fed is still planning on cutting rates three times in 2024, which would see the prime rate reduced by 75 basis points over the next 8 months.

However, what likely stood out to most market participants was what he had to say about economic reports from the previous two months. Essentially, he downplayed them during his press conference and indicated that there was confidence that inflation rates would head back to 2 percent in a timely manner.

Of course, the Fed announcement wasn’t the only important news. On Thursday, unemployment benefit claim figures were released and revealed that 210,000 requests were made for benefits in the past seven days. This was slightly lower than the projected 212,000.

In addition, Flash Services PMI and Flash Manufacturing PMI data was made available. The Flash Services PMI came in at 51.7 percent compared to a projected 52 percent while the Flash Manufacturing PMI came in at 52.5 percent compared to a projected 51.8 percent. These figures suggest that both the services and manufacturing sectors are growing albeit slower than expected.

Finally, it was revealed that 4.38 million existing homes were sold throughout the country in February. This was compared to an expected 3.95 million and was significantly higher than last month’s reading.

The S&P 500 was up 1.33 percent this week to close at 5,234. On Tuesday, the market made its low of the week at 5,136 before shooting up to a high of 5,255 on Thursday afternoon. For the month, the S&P is up 2.58 percent and is up 10.36 percent year-to-date.

The Nasdaq finished higher this week up 1.27 percent to close at 16,428. The Nasdaq would trade mostly sideways prior to Wednesday’s news announcement before shooting up to a weekly high of 16,344 by Thursday’s open. The weekly low was 15,972, which occurred on Tuesday morning. For the year, the Nasdaq has increased 11.26 percent

The Dow Jones Industrial Average increased 1.71 percent during the past five trading days to finish at 39,475. On Tuesday, the market made its low of the week at 38,787 while it would make a high of 39,858 on Thursday. The index has returned 4.67 percent in 2024.

There were several announcements made overseas that could have an impact on American financial policy going forward. Late Monday, the Bank of Japan (BOJ) announced that it would increase its key interest rate to .1 percent from negative .1 percent. Also on Monday, Australia’s central bank announced that it would keep its key interest rate at 4.35 percent.

The Bank of Canada (BOC) announced on Tuesday that inflation came in lower than expected on both an annualized and monthly basis. Switzerland’s central bank on Thursday cut the country’s interest rate from 1.75 percent to 1.5 percent, which may portend the beginning of a rate cut cycle throughout the globe.

This upcoming trading week will be truncated by the Good Friday holiday. The CB Consumer Confidence report will be released Tuesday. On Wednesday night, FOMC member Waller will be speaking. Thursday sees the release of monthly pending home sales figures. The revised University of Michigan Consumer Sentiment report will also be issued on Thursday along with unemployment claims and final GDP numbers for the fourth quarter of 2023.

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