4/15/23 Weekly Market Commentary

4/15/23 Weekly Market Commentary

April 15, 2024

What happened last week…         

Stocks landed in the red last week with the three major indices performing as follows: DJIA (-2.37%), S&P 500 (-1.56%), NASDAQ (-0.45%). Both the DJIA and the S&P 500 recorded back-to-back negative weeks while the tech-heavy NASDAQ is in the red for the past three weeks. Year-to-date performances are as follows: DJIA (0.78%), S&P 500 (7.41%), NASDAQ (7.75%).

 

The inflation rate year-over-year for March landed higher than expectations (3.4%) as it increased to 3.5% from 3.2%, marking back-to-back months of higher readings. The rate peaked at 9.1% in June 2022. Meanwhile, the core inflation rate year-over-year for March was also higher than expectations (3.7%) as it remained at 3.8%, nearly a three-year low.

 

With the timing of potential interest rate cuts tied to the taming of inflation, the market’s expectation for the first rate cut has shifted from June. According to the CME FedWatch Tool, as of April 12, traders now expect the Fed to cut rates in September. Kristalina Georgieva, managing director of the International Monetary Fund believes the Federal Reserve could start cutting interest rates by the end of 2024.

 

JPMorgan Chase (JPM) CEO Jamie Dimon, in his company’s earnings report said, “Many economic indicators continue to be favorable” but noted “there seems to be a large number of persistent inflationary pressures, which may likely continue.” In his annual shareholder letter, Dimon cited inflationary factors that included “ongoing fiscal spending, remilitarization of the world, restructuring of global trade, capital needs of the new green economy, and possibly higher energy costs in the future.”

 

As of April 5, for Q1 2024, the estimated earnings growth for the S&P 500 is 3.2%, which would be the third-straight quarter of year-over-year growth. Revenue growth for the index is expected to reach 3.5%, which would be the 14th consecutive quarter of growth. For the full year, the earnings growth is expected to hit double-digits of 10.9% with revenue growth of 5.1%. As of April 12, 6% of S&P 500 companies have reported earnings with 83% having a positive EPS surprise and 53% having a positive revenue surprise.

Happening this week…

Here are a few companies reporting earnings this week: JNJ, PNC, UNH, BX, GPC, NFLX, PG.

On Thursday, existing home sales for March are expected to decrease to 4.20 million from 4.38 million, which was the highest reading in a year.


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.

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