Market Perspective for March 31, 2024

The final trading week in March was truncated due to markets being closed for the Good Friday holiday . However, there were multiple news events released throughout the week with a few important pieces of information released on Friday morning.

On Monday, new home sales figures were released, and in the month of February, there were 662,000 such sales. This was lower than the expected 675,000 and lower than the January total of 664,000. A reduction in new home sales might indicate tightness in the housing markets, which may impact home prices as well as interest rates on new mortgages. All of these variables can have a impact on inflation as well as the overall health of the economy.

Multiple news reports came out on Tuesday with the CB Consumer Confidence report being the most important to traders. It came in at 104.7, which was lower than the expected 106.9 and lower than the 104.8 figure from February.

Core durable orders were up .5 percent while durable orders overall increased 1.4 percent on a monthly basis. Each figure came in higher than expected and represented a rebound from the previous month in which core durable orders were down .4 percent and durable orders overall were down 6.2 percent.

On Thursday, monthly pending home sales data was released, and it found that there was a 1.6 percent increase during February. This was much higher than the drop of 4.7 percent in January and was also higher than the expected gain of 1.4 percent prior to the news release. In addition, unemployment claims data was released Thursday morning, with 210,000 requests for benefits over the past seven days.

Final gross domestic product (GDP) figures for the final quarter of 2023 were made public on Thursday morning. For the final three months of 2023, the economy expanded by 3.4 percent compared to an expected 3.2 percent, which likely continues to bolster the idea that the Fed will be able to achieve a soft economic landing despite keeping interest rates elevated.

Finally, the revised University of Michigan consumer sentiment and inflation expectation figures were made available on Thursday morning. Consumer sentiment was at 79.4 percent compared to an initial 76.5 percent while inflation expectations dropped from 3 percent to 2.9 percent.

On Friday, the Core PCE Index came in at .3 percent on a monthly basis, which was what analysts expected prior to the release. It was also lower than the .5 percent figure reported in February. Later on Friday, Fed Chair Jerome Powell said that he was pleased that the report came in as expected. However, he cautioned that there was no rush to cut rates and that he wanted to see more data indicating that inflation was getting closer to 2 percent.

The S&P 500 was up 13.53 points to close at 5,254 for the week. It would make a weekly low of 5,204 on Tuesday before reversing and making a weekly high of 5,263 late on Friday before easing back to the closing price.

The Dow closed slightly lower this week losing 16.08 points to finish at 39,807. Like the S&P, this index made its weekly low on Tuesday of 39,292 before rebounding and making a high of 39,855 late on Friday.

Finally, the Nasdaq also finished slightly lower this week falling 18.07 points to close at 16,379. On Wednesday, the market made its weekly low of 16,298 while the weekly high was put in place on Tuesday when it hit 16,461.

This week will see the release of the nonfarm payroll (NFP) report for March on Friday. The Job Openings and Labor Turnover Survey (JOLTS) report will be issued on Tuesday. The ADP version of the NFP report will be released on Wednesday. Jerome Powell is also expected to give a speech on Wednesday, which the markets will follow closely.

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