3/25/24 Weekly Market Commentary

3/25/24 Weekly Market Commentary

March 25, 2024

What happened last week…         

The Federal Open Market Committee (FOMC) kept interest rates unchanged at 5.25% to 5.50% for the fifth straight meeting, the last hike occurring last July. The updated “dot plot” from Fed officials indicated that there would be three 25 basis point reductions by the end of this year and potentially three cuts next year. According to the CME FedWatch Tool, as of March 22, there is a 66.5% probability for the first rate cut to happen after the FOMC’s June meeting. Federal Reserve Chairman Jerome Powell said, “We believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.” Regarding a strong labor market’s impact on interest rates, Powell said, “Strong hiring in and of itself would not be a reason to hold off on rate cuts.”

 

Fed officials also updated their economic projections. For 2024, the change in real GDP is expected to reach 2.1% (up from the 1.4% projection in December), unemployment of 4.0% (down from 4.1%), PCE inflation of 2.4% (unchanged), and core PCE inflation of 2.6% (up from 2.4%). For 2025, the forecast sees the change in real GDP of 2.0%, unemployment of 4.1%, inflation of 2.2%, and core PCE inflation of 2.2%.

 

The Department of Justice, along with 16 state and district attorneys general, filed an antitrust lawsuit against Apple (AAPL). The complaint “alleges that Apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers. Apple undermines apps, products, and services that would otherwise make users less reliant on the iPhone, promote interoperability, and lower costs for consumers and developers.”

 

Existing home sales for February beat expectations (3.94 million) as it increased to 4.38 million from 4.00 million, making it the highest reading in a year.

 

Happening this week…

On Monday, new home sales for February are expected to increase to 680,000 from 661,000. The peak reading over the previous 12 months is 728,000 from last July.

 

On Thursday, the GDP growth rate (final estimate) for Q4 2023 is expected to match the prior reading of 3.2%, which was a decline from the Q3 2023 reading of 4.9%—the highest since Q4 2021.

 

On Friday, the stock market will be closed in observance of Good Friday.

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.

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.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All investing involves risk including loss of principal.