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3/11/24 Weekly Market Commentary

3/11/24 Weekly Market Commentary

March 11, 2024

What happened last week…         

In his semiannual testimony to Congress, Federal Reserve Chairman Jerome Powell said, “We’re waiting to become more confident that inflation is moving sustainably at 2%. When we do get that confidence, and we’re not far from it, it’ll be appropriate to begin to dial back the level of restriction.” Powell did not give a timeline as to when the first rate cuts would occur but did indicate that they would begin this year. Regarding the possibility of a recession Powell said, “I will say there’s no evidence or no reason to think that the US economy is in, or in some kind of, short-term risk of falling into a recession.” The next Federal Open Market Committee meeting is scheduled for March 19-20. Interest rates are expected to remain at 5.25% to 5.50% after that meeting.


The non-manufacturing PMI for February missed expectations (53.0) as it decreased to 52.6 from 53.4, making it the 14th straight month of an expansionary reading.


The ADP employment change missed expectations (150,000) but increased to 140,000 from the upwardly revised 111,000 (from 107,000). The unemployment rate landed higher than expectations (3.7%) as it increased to 3.9% from 3.7%, making it the highest reading since January 2022. Nonfarm payrolls beat expectations (198,000) as it increased to 275,000 from the downwardly revised 229,000 (from 353,000). Average hourly earnings month-over-month landed below expectations (0.2%) as it decreased to 0.1% from the downwardly revised 0.5% (from 0.6%).


According to FactSet, as of March 8, for Q1 2024, the estimated earnings growth for the S&P 500 is 3.4%, which would be the third-straight quarter of growth. Revenue growth is estimated to reach 3.5%, which would be the 14th straight quarter of growth for the index. For Q4 2023, 99% of S&P 500 companies have reported earnings with 73% having a positive EPS surprise and 64% having a positive revenue surprise. The blended earnings for the S&P 500 is 4.1% while blended revenue for the index is also 4.1%. For the stocks in the Rockline portfolios, as of March 8, 94% of companies have reported earnings with 85% having a positive EPS surprise and 73% having a positive revenue surprise.


Economic News happening this week…

On Tuesday, the inflation rate year-over-year for February is expected to remain at 3.1%, well below the peak rate of 9.1% that was reported in June 2022.

Thanks for Reading

- The Rockline Team

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

The S&P 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

All investing involves risk including loss of principal.