3/18/24 Weekly Market Commentary

3/18/24 Weekly Market Commentary

March 18, 2024

What happened last week…         

Stocks were lower again for the week as the three major indices performed as follows: DJIA (-0.02%), S&P 500 (-0.13%), NASDAQ (-0.70%). Despite back-to-back negative weeks, the S&P 500 remains on pace to have its fifth straight monthly gain. Year-to-date performances are as follows: DJIA (2.72%), S&P 500 (7.28%), NASDAQ (6.41%).

 

According to the Q1 CNBC CFO Council Survey, a five-quarter high 48% of CFOs believe the Federal Reserve will be able to achieve a soft landing. Nearly 80% of CFOs also believe that inflation will not come down to the Fed’s 2% target before 2025 at the earliest. Regarding interest rates, 44% of CFOs do not expect a rate cut until September, which is later than the CME FedWatch Tool’s projection of a rate cut potentially coming in June. CNBC noted that “equal groups of just under 25% of CFO respondents think the cuts will begin in June or July.” Lastly, more than 80% of CFOs “believe the Dow Jones Industrial Average is more likely to continue its run up to the 40,000-point mark, with technology continuing to lead the way among sectors, than slip into a bear market.”

 

The inflation rate year-over-year for February landed higher than expectations (3.1%) as it increased to 3.2% from 3.1%, which is still well below the peak rate of 9.1% that was reported in June 2022. Meanwhile, the core inflation rate year-over-year for February also landed higher than expectations (3.7%) but decreased to 3.8% from 3.9%. It is the lowest reading since May 2021 (3.8%).

 

Eli Lilly (LLY) announced that Amazon Pharmacy will deliver some prescription medications, such as its weight loss treatment, to patient’s homes in a direct-to-consumer program.

 

Happening this week…

The following company reports earnings this week: LULU.

 

On Wednesday, the Federal Open Market Committee meets and is expected to keep interest rates unchanged at 5.25% to 5.50%. Rates have remained at that level for four straight meetings. According to the CME FedWatch Tool, as of March 15, there is a 52.9% probability that the Fed will initiate its first 25-basis point rate cut of the year after its June meeting.

 

On Thursday, existing home sales for February are expected to decrease to 3.95 million from 4.00 million, which was the highest reading in five months.


Thanks for reading!


- The Rockline Team


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The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

 The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

 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.

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