March 2024 – What I'm Watching This Week

What I’m Watching This Week – 25 March 2024

Published on March 25, 2024 by dredheadz

The Markets (as of market close March 22, 2024)

Despite a dip last Friday, stocks closed out last week higher. The S&P 500 recorded its biggest weekly percentage gain of the year, while the Dow and the Nasdaq hit record highs. Investors gained a bit of encouragement after the Federal Reserve maintained projections for three interest rate cuts by year’s end. Each of the market sectors moved higher last week, with communication services and industrials gaining 3.9% and 3.5%, respectively. Both the dollar and gold prices advanced. Crude oil prices declined for the week, influenced by a rising dollar (since oil is priced in dollars, if the dollar goes up, oil prices generally go down, because you need fewer dollars to buy that oil).

Wall Street got off to a good start last week, led by tech and AI stocks. The Nasdaq rose 0.8%, followed by the S&P 500 (0.6%), the Global Dow (0.3%), and the Dow (0.2%). The small caps of the Russell 2000 fell 0.7%. Yields on 10-year Treasuries rose 3.6 basis points to 4.34%. Crude oil prices jumped $1.87 to settle at about $82.91 per barrel, the highest level since October. Reduced crude exports from Iraq and Saudi Arabia, along with rising demand, helped drive crude oil prices higher. The dollar and gold prices inched up 0.2% and 0.1%, respectively.

Stocks advanced for a second straight session last Tuesday as investors awaited the results of the Federal Reserve meeting. While it is widely anticipated that the Fed will maintain interest rates at their current level, attention will be focused on the projected frequency and timing of potential rate cuts. The Dow (0.8%) led the benchmark indexes, followed by the S&P 500 (0.6%), the Russell 2000 (0.5%), the Nasdaq (0.4%), and the Global Dow (0.3%). Ten-year Treasury yields settled at 4.29% after falling 4.3 basis points. Crude oil prices continued to surge, rising $0.75 to $83.47 per barrel. The dollar rose 0.2%, while gold prices dipped 0.2%.

Wall Street rallied last Wednesday as investors were cautiously encouraged by the Federal Reserve’s projections of three interest rate cuts this year. The Russell 2000 advanced 1.9%, the Nasdaq rose 1.3%, the Dow climbed 1.0%, the S&P 500 gained 0.9%, and the Global Dow increased 0.7%. Ten-year Treasury yields dipped 2.4 basis points, settling at 4.27%. Crude oil prices saw the end to a rally as prices fell $1.63 to $81.84 per barrel. The dollar fell 0.4%, while gold prices rose 1.4%.

Stocks continued to climb higher last Thursday, with each of the benchmark indexes listed here advancing. The Russell 2000 led the charge for the second straight session after increasing 1.1%, followed by the Global Dow (0.8%), the Dow (0.7%), the S&P 500 (0.3%), and the Nasdaq (0.2%). Ten-year Treasury yields moved minimally, closing at 4.27%. Crude oil prices dipped for the second consecutive day, settling at $80.90 per barrel. The dollar rose 0.6%, while gold prices rose 1.1%.

Equities closed generally lower last Friday, with only the Nasdaq finishing the session up after gaining 0.2% to reach a record high. The Russell 2000 lost 1.3%, followed by the Dow (-0.8%), the Global Dow (-0.3%), and the S&P 500 (-0.1%). Crude oil prices fell for the third straight session, dipping 0.31%. Ten-year Treasury yields fell 5.3 basis points to 4.21%. The dollar advanced 0.4%, while gold prices were flat.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 3/22	Weekly Change	YTD Change
DJIA	37,689.54	38,714.77	39,475.90	1.97%	4.74%
Nasdaq	15,011.35	15,973.17	16,428.82	2.85%	9.44%
S&P 500	4,769.83	5,117.09	5,234.18	2.29%	9.74%
Russell 2000	2,027.07	2,039.32	2,072.00	1.60%	2.22%
Global Dow	4,355.28	4,572.84	4,645.33	1.59%	6.66%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	4.30%	4.21%	-9 bps	35 bps
US Dollar-DXY	101.39	103.43	104.42	0.96%	2.99%
Crude Oil-CL=F	$71.30	$81.00	$80.88	-0.15%	13.44%
Gold-GC=F	$2,072.50	$2,161.20	$2,168.10	0.32%	4.61%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

The Federal Open Market Committee maintained the target range for the federal funds rate at 5.25%-5.50%, as expected. In its statement, the FOMC indicated that, “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2.0%.” During his press conference following the meeting, Fed Chair Jerome Powell noted that an interest rate cut is not on the immediate horizon. As to the increase in prices over the past few months, Powell said that the Committee anticipated that the path of lowering inflation may be bumpy. However, the FOMC is looking at the performance of inflation over time, not just a few months. The Fed retained its forecast for three rate cuts this year.
February saw sales of existing homes jump 9.5%, although sales declined 3.3% year over year. Additional supply and consistent demand have helped drive sales throughout the country. Unsold inventory sat at a 2.9-month supply in February, down from 3.0 months in January. The median existing-home sales price was $384,500 in February, up from $378,600 in January, and well above the February 2023 price of $363,600. Existing single-family home sales also grew in February, up 10.3% but down 2.7% from a year earlier. The median price for existing single-family homes was $388,700, higher than the January price of $382,900, and over the February 2023 price of $368,100.
The number of residential building permits issued in February was 1.9% above the January rate. The number of single-family building permits issued in February increased 1.0%. The number of housing starts in February rose 10.7% above the January estimate, while single-family housing starts increased 11.6%. Housing completions in February rose 19.7% over January. Single-family housing completions advanced 20.2% last month.
The national average retail price for regular gasoline was $3.453 per gallon on March 18, $0.077 per gallon more than the prior week’s price and $0.031 per gallon more than a year ago. Also, as of March 18, the East Coast price increased $0.084 to $3.349 per gallon; the Midwest price rose $0.022 to $3.309 per gallon; the Gulf Coast price increased $0.154 to $3.099 per gallon; the Rocky Mountain price rose $0.089 to $3.166 per gallon; and the West Coast price increased $0.084 to $4.380 per gallon.
For the week ended March 16, there were 210,000 new claims for unemployment insurance, a decrease of 2,000 from the previous week’s level, which was revised up by 3,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended March 9 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended March 9 was 1,807,000, an increase of 4,000 from the previous week’s level, which was revised down by 8,000. States and territories with the highest insured unemployment rates for the week ended March 2 were New Jersey (2.9%), Rhode Island (2.7%), California (2.5%), Minnesota (2.5%), Massachusetts (2.4%), Illinois (2.2%), Montana (2.0%), New York (2.0%), Pennsylvania (2.0%), Alaska (1.9%), Connecticut (1.9%), and Washington (1.9%). The largest increases in initial claims for unemployment insurance for the week ended March 9 were in Oregon (+2,216), California (+462), Indiana (+427), Texas (+392), and Nevada (+342), while the largest decreases were in New York (-14,583), Ohio (-1,453), New Hampshire (-446), Massachusetts (-305), and Vermont (-289).

Eye on the Week Ahead

The last week of March brings with it the final estimate of gross domestic product for the fourth quarter of 2023. According to the second estimate, the economy accelerated at an annualized rate of 3.2%. Also out this week is the February report on personal income and expenditures, which includes the personal consumption expenditures price index, the preferred inflation indicator of the Federal Reserve. With other indicators, such as the Consumer Price Index, showing that inflation rose in February, it is expected the PCE price index will also show in increase consumer prices.

What I’m Watching This Week – 18 March 2024

Published on March 18, 2024 by dredheadz

The Markets (as of market close March 15, 2024)

Equities closed lower for the second straight week, with the Russell 2000 losing nearly 2.0%. A sell-off in tech shares pulled the Nasdaq down 0.7%, marking the first back-to-back weekly losses since last October. Higher-than-expected inflation data may have raised investor concerns that the Federal Reserve may keep interest rates elevated for longer than hoped for. Information technology, consumer discretionary, health care, industrials, real estate, and utilities underperformed, while energy jumped more than 4.0%. Long-term bond prices slipped, driving yields higher. The dollar ended the week higher. Crude oil prices rose 4.0%. Gold prices declined, ending a three-week rally.

Stocks mostly slipped lower to start the week, with only the Dow inching up 0.1%, as investors may have exercised caution ahead of the upcoming Consumer Price Index report. The Russell 2000 (-0.8%), the Nasdaq (-0.4%), the Global Dow (-0.4%), and the S&P 500 (-0.1%) lost value last Monday. Ten-year Treasury yields gained 1.5 basis points to close at 4.10%. Crude oil prices ticked up 0.1% to reach $78.09 per barrel. The dollar and gold prices rose 0.1%.

Wall Street saw stocks edge higher last Tuesday, despite a slight bump in the February Consumer Price Index (see below). The Nasdaq (1.5%) and the S&P 500 (1.1%) led the benchmark indexes listed here, followed by the Dow (0.6%) and the Global Dow (0.5%). The Russell 2000 declined less than 0.1%. The expected increase in prices did not dampen investors’ expectations that the Federal Reserve will cut rates, possibly in June. Tech and AI shares resumed their recent rally, helping to push stocks higher. Ten-year Treasury yields closed at 4.15% after adding 5.1 basis points. Crude oil prices slipped $0.19 to $77.74 per barrel as Houthi forces stepped up Red Sea attacks. The dollar inched up 0.1%, while gold prices fell for the first time in several sessions, declining 1.2%.

The Russell 2000 (0.3%), the Global Dow (0.2%), and the Dow (0.1%) advanced last Wednesday, while the Nasdaq (-0.5%) and the S&P 500 (-0.2%) declined, as the tech rally slowed. Yields on 10-year Treasuries gained 3.7 basis points to close at 4.19%. Crude oil prices rose to $79.73 per barrel after increasing $2.17. The dollar dipped 0.1%, while gold prices rose 0.5%.

Stocks closed lower last Thursday, likely in response to another batch of higher-than-expected inflation data. Ten-year Treasury yields also jumped 10.6 basis points to 4.29% as bond prices slid lower. Crude oil prices reached a four-month high after hitting $80.08 per barrel. The dollar advanced 0.6%, while gold prices fell 0.7%. Each of the benchmark indexes listed here lost value, led by the Russell 2000, which fell 2.0%. The Global Dow declined 0.5%, the Dow lost 0.4%, while the Nasdaq and the S&P 500 dipped 0.3%.

Friday saw stocks fall, with the Nasdaq (-1.0%) and the S&P 500 (-0.7%) dropping the furthest among the benchmark indexes listed here. The Dow lost 0.5% and the Global Dow dipped 0.3%. The Russell 2000 rose 0.4%. Ten-year Treasury yields ticked up less than 1.0 basis point. Crude oil prices followed two days of advances by slipping 0.3%. The dollar inched up 0.1%, while gold prices fell 0.3%.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 3/15	Weekly Change	YTD Change
DJIA	37,689.54	38,722.69	38,714.77	-0.02%	2.72%
Nasdaq	15,011.35	16,085.11	15,973.17	-0.70%	6.41%
S&P 500	4,769.83	5,123.69	5,117.09	-0.13%	7.28%
Russell 2000	2,027.07	2,082.71	2,039.32	-2.08%	0.60%
Global Dow	4,355.28	4,592.17	4,572.84	-0.42%	5.00%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	4.08%	4.30%	22 bps	44 bps
US Dollar-DXY	101.39	102.75	103.43	0.66%	2.01%
Crude Oil-CL=F	$71.30	$77.88	$81.00	4.01%	13.60%
Gold-GC=F	$2,072.50	$2,184.80	$2,161.20	-1.08%	4.28%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

Inflation rose for the second straight month in February. The Consumer Price Index increased 0.4% last month after rising 0.3% in January. Over the last 12 months, the CPI increased 3.2%. Prices for shelter rose 0.4% in February and prices for gasoline increased 3.8%. Combined, these two indexes contributed over 60.0% of the monthly increase. Prices for food were unchanged in February. Energy prices rose 2.3%, while prices less food and energy advanced 0.4%. Over the last 12 months, prices for food rose 2.2% while energy prices decreased 1.9%. Prices less food and energy increased 3.8% since February 2023. Shelter prices increased 5.7% over the last year, accounting for roughly two thirds of the total 12-month increase in prices less food and energy. Other indexes with notable increases over the last year include motor vehicle insurance (20.6%), medical care (1.4%), recreation (2.1%), and personal care (4.2%).
The Producer Price Index rose a higher-than-expected 0.6% in February, following a 0.3% increase in January. Excluding prices for food and energy, producer prices rose 0.3% in February. For the 12 months ended in February, the PPI advanced 1.6%, the largest increase since the 12-month period ended in September 2023. In February, nearly two thirds of the rise in producer prices could be traced to prices for goods, which advanced 1.2%. Prices for services moved up 0.3%. The increase in producer prices is in line with the Consumer Price Index, which showed price pressures have held firmer than expected.
Retail and food services sales rose 0.6% last month and 1.5% over the February 2023 rate. Retail trade sales increased 0.6% in February and 0.8% above last year. Nonstore (internet) retail sales dipped 0.1% in February but were up 6.4% over the last 12 months.
Prices for both imports and exports advanced in February. Import prices rose 0.3% last month after rising 0.8% in January. Despite the recent increases, import prices decreased 0.8% over the past 12 months. Import fuel prices rose 1.8% in February, while nonfuel import prices ticked up 0.2%. Export prices increased 0.8% in February after rising 0.9% in January. Nevertheless, since February 2023, export prices have fallen 1.8%, which was the smallest 12-month decrease since the 12-month period ended in February 2023.
The Treasury budget deficit was $296.0 billion in February, up from $22.0 billion in January. Total receipts were $271.0 billion, while outlays were $567.0 billion. Through the first five months of the fiscal year, the deficit is $828.0 billion, about $100.0 billion above the deficit over the same period for the last fiscal year.
Industrial production edged up 0.1% in February after declining 0.5% in January. In February, manufacturing rose 0.8% after declining 1.1% in January. Mining climbed 2.2%. The gains in manufacturing and mining partly reflected recoveries from weather-related declines in January. Utilities fell 7.5% in February because of warmer-than-typical temperatures. Total industrial production in February was 0.2% below its year-earlier level.
The national average retail price for regular gasoline was $3.376 per gallon on March 11, $0.026 per gallon more than the prior week’s price but $0.080 per gallon less than a year ago. Also, as of March 11, the East Coast price increased $0.025 to $3.265 per gallon; the Midwest price rose $0.018 to $3.287 per gallon; the Gulf Coast price fell $0.004 to $2.945 per gallon; the Rocky Mountain price rose $0.063 to $3.077 per gallon; and the West Coast price increased $0.067 to $4.296 per gallon.
For the week ended March 9, there were 209,000 new claims for unemployment insurance, a decrease of 1,000 from the previous week’s level, which was revised down by 7,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended March 2 was 1.2%, unchanged from the previous week’s rate, which was revised down by 0.1%. The advance number of those receiving unemployment insurance benefits during the week ended March 2 was 1,811,000, an increase of 17,000 from the previous week’s level, which was revised down by 112,000. States and territories with the highest insured unemployment rates for the week ended February 24 were Rhode Island (3.1%), New Jersey (2.9%), Massachusetts (2.6%), California (2.4%), Minnesota (2.4%), Illinois (2.2%), New York (2.2%), Connecticut (2.1%), Montana (2.0%), and Pennsylvania (2.0%). The largest increases in initial claims for unemployment insurance for the week ended February 24 were in New York (+14,176), California (+5,549), Texas (+2,102), Michigan (+979), and Florida (+783), while the largest decreases were in Massachusetts (-3,894), Rhode Island (-1,955), Oregon (-1,063), Georgia (-882), and Tennessee (-335).

Eye on the Week Ahead

The Federal Open Market Committee meets this week. It is not expected that the Committee will lower interest rates at this time, however, it may give some more discernible indication as to when rates may be decreased. The FOMC does not meet again until the beginning of May.

What I’m Watching This Week – 11 March 2024

Published on March 11, 2024 by dredheadz

The Markets (as of market close March 8, 2024)

Wall Street fell from record highs to close generally lower last week. A better-than-expected jobs report (see below) helped support the notion that the economy remains strong and that the Federal Reserve will likely cut interest rates, possibly after their June meeting. However, the unemployment rate ticked up for the first time in four months. The tech-heavy Nasdaq led the decline in the benchmark indexes for the week, with only the Global Dow and the Russell 2000 closing higher. Crude oil prices posted a weekly loss as China’s demand waned. Gold prices rallied to their largest weekly increase in five months, driven higher by optimism of mid-year interest rate cuts.

Stocks closed last Monday in the red. After reaching record highs the prior week, both the Nasdaq (-0.4%) and the S&P 500 (-0.1%) fell. The Dow lost 0.3%, while the Russell 2000 slipped 0.1%. The Global Dow was flat. Ten-year Treasury yields inched up to 4.21%. Crude oil prices settled at about $78.72 per barrel after declining $1.25. The dollar ended the session where it began, while gold prices added 1.4%.

Wall Street saw equities extend their losses last Tuesday, driven by a widespread sell-off of tech shares. The Nasdaq fell 1.7% to lead the downturn, followed by the Russell 2000, Dow, and the S&P 500 (-1.0%). The Global Dow dipped 0.3%. The yield on 10-year Treasuries fell 8.2 basis points to 4.13%. Crude oil prices also continued to decline, falling to $78.14 per barrel. The dollar was flat, while gold prices rose 0.5%.

Last Wednesday saw stocks rebound after Fed Chair Jerome Powell maintained his stance that interest rates are likely to be cut sometime this year. The Russell 2000 and the Global Dow gained 0.7%, followed by the Nasdaq (0.6%), the S&P 500 (0.5%), and the Dow (0.2%). Ten-year Treasury yields slipped 3.3 basis points to close at 4.10%. Crude oil prices gained nearly $1.00 to settle at $79.13 per barrel. The dollar fell 0.4%, while gold prices rose 0.6%.

Stocks advanced for the second straight day last Thursday, with both the Nasdaq and the S&P 500 hitting new record highs. Tech shares fueled much of the rally, particularly AI stocks. By the close of trading, the Nasdaq rose 1.5%, the S&P 500 climbed 1.0%, the Russell 2000 gained 0.8%, the Global Dow advanced 0.7%, and the Dow increased 0.3%. Ten-year Treasury yields ticked lower to close at 4.09%. Crude oil prices closed at $78.89 per barrel. The dollar continued to slide, falling 0.5%. Gold prices advanced for the fourth straight day.

Last Friday’s volatile session saw stocks finish lower as a rally in chip stocks lost steam. Each of the benchmark indexes finished the session lower, with the Nasdaq falling the furthest (-2.3%), followed by the S&P 500 (-0.7%), the Dow (-0.2%), and the Russell 2000 (-0.1%). the Global Dow ended the session where it began. Ten-year Treasury yields were flat, while crude oil prices slipped 1.4%. The dollar lost less than 0.1%, while gold prices rose 0.9%.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 3/8	Weekly Change	YTD Change
DJIA	37,689.54	39,087.38	38,722.69	-0.93%	2.74%
Nasdaq	15,011.35	16,274.94	16,085.11	-1.17%	7.15%
S&P 500	4,769.83	5,137.08	5,123.69	-0.26%	7.42%
Russell 2000	2,027.07	2,076.39	2,082.71	0.30%	2.74%
Global Dow	4,355.28	4,539.46	4,592.17	1.16%	5.44%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	4.18%	4.08%	-10 bps	22 bps
US Dollar-DXY	101.39	103.88	102.75	-1.09%	1.34%
Crude Oil-CL=F	$71.30	$79.80	$77.88	-2.41%	9.23%
Gold-GC=F	$2,072.50	$2,092.40	$2,184.80	4.42%	5.42%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

Employment rose by 275,000 in February. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing. The change in employment for December was revised down by 43,000, and the change for January was revised down by 124,000. With these revisions, employment in December and January combined was 167,000 lower than previously reported. In February, the unemployment rate rose by 0.2 percentage point to 3.9%, and the number of unemployed people increased by 334,000 to 6.5 million. A year earlier, the jobless rate was 3.6%, and the number of unemployed people was 6.0 million. In February, the labor force participation rate was 62.5% for the third consecutive month, while the employment-population ratio decreased 0.1 percentage point to 60.1%. In February, average hourly earnings edged up by $0.05 to $34.57, following an increase of $0.18 in January. Average hourly earnings were up by 0.1% in February and 4.3% over the last 12 months. In February, the average workweek edged up by 0.1 hour to 34.3 hours, following a decline of 0.2 hour in January.
According to the latest Job Openings and Labor Turnover Survey, the number of job openings in January, at 8.9 million, was little changed from the previous month. The total number of hires, at 5.7 million, fell by 100,000, while total separations, at 5.3 million, decreased by 78,000.
Purchasing manager survey respondents noted a solid performance in February, according to the latest purchasing managers’ index from S&P Global. Output rose for the 13th consecutive month, while new business rose for the fourth straight month in February. Costs to service providers eased to the slowest pace since October 2020.
The international trade in goods and services deficit in January was $67.4 billion, up $3.3 billion, or 5.1% from the December deficit. January exports were $257.2 billion, $0.3 billion, or 0.1% more than December exports. January imports were $324.6 billion, $3.6 billion, or 1.1% more than December imports. Since January 2023, the goods and services deficit decreased $2.9 billion, or 4.1%. Exports decreased $1.0 billion, or 0.4%, while imports fell $3.9 billion, or 1.2%.
The national average retail price for regular gasoline was $3.350 per gallon on March 4, $0.101 per gallon more than the prior week’s price but $0.039 per gallon less than a year ago. Also, as of March 4, the East Coast price increased $0.036 to $3.240 per gallon; the Midwest price rose $0.171 to $3.269 per gallon; the Gulf Coast price climbed $0.104 to $2.949 per gallon; the Rocky Mountain price advanced $0.032 to $3.014 per gallon; and the West Coast price increased $0.147 to $4.229 per gallon.
For the week ended March 2, there were 217,000 new claims for unemployment insurance, unchanged from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended February 24 was 1.3%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended February 24 was 1,906,000, an increase of 8,000 from the previous week’s level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended February 17 were New Jersey (2.8%), Rhode Island (2.7%), Minnesota (2.5%), California (2.4%), Massachusetts (2.4%), Illinois (2.2%), Montana (2.1%), Alaska (2.0%), New York (2.0%), and Pennsylvania (2.0%). The largest increases in initial claims for unemployment insurance for the week ended February 24 were in Massachusetts (+4,032), Rhode Island (+1,936), Connecticut (+429), California (+311), and Missouri (+310), while the largest decreases were in Oklahoma (-1,943), Texas (-1,121), Michigan (-980), Oregon (-823), and Florida (-752).

Eye on the Week Ahead

Inflation data for February is available this week with the Consumer Price Index, import and export prices, and the Producer Price Index. January saw prices increase across the board, although 12-month data showed prices either decreased or were unchanged.

What I’m Watching This Week – 4 March 2024

Published on March 4, 2024 by dredheadz

The Markets (as of market close March 1, 2024)

Wall Street continued its February rally into March as stocks closed last week notably higher with the exception of the Dow, which ticked lower. Investor enthusiasm about tech shares, particularly AI stocks, helped drive the upturn. Inflation data also was positive. While consumer prices ticked up in January, the 12-month rate actually declined, lessening concerns that the Federal Reserve would delay interest rate cuts beyond this year. Information technology led the market sectors, with real estate and consumer discretionary also moving higher. The yield on 10-year Treasuries fell as bond prices advanced. Crude oil prices ended the week higher. The dollar slipped lower, while an end-of-week rally helped drive gold prices up.

Last Monday saw stocks step back from the prior week’s record highs as investors awaited the latest inflation data. Among the benchmark indexes listed here, only the Russell 2000 gained, finishing the session up 0.7%. The remaining indexes closed the day in the red, with the S&P 500 falling 0.4%, while the Global Dow dropped 0.3%. the Dow and the Nasdaq dipped about 0.1%. Ten-year Treasury yields inched up to 4.29% after gaining 3.9 basis points. Crude oil prices rose $1.17 to $77.66 per barrel. The dollar and gold prices declined.

Stocks were mixed last Tuesday, with the Russell 2000 (1.4%) extending gains from the previous session. The Nasdaq advanced 0.4%, the Global Dow rose 0.3%, and the S&P 500 ticked up 0.2%. The Dow dipped 0.3%. Crude oil prices rose to $78.65 per barrel after gaining $1.07 due to supply concerns and a stronger U.S. demand. Ten-year Treasury yields settled at 4.31%. The dollar and gold prices were flat.

Wall Street saw stocks slip lower last Wednesday as investors were a bit apprehensive ahead of the upcoming inflation report. Each of the benchmark indexes listed here closed the session lower, with the Russell 2000 falling the furthest (-0.8%), followed by the Nasdaq (-0.6%), the Global Dow (-0.3%), and the Dow (-0.1%). Ten-year Treasury yields dipped 4.1 basis points to 4.27%. Crude oil prices declined $0.45 to $78.42 per barrel. The dollar and gold prices were flat.

Stocks closed higher last Thursday as investors gained some relief that the latest price inflation data matched expectations. The Nasdaq gained 0.9% to reach an all-time high. The Russell 2000 added 0.7%, the S&P 500 gained 0.5%, while the Dow and the Global Dow inched up 0.1%. Ten-year Treasury yields slipped to 4.25%. Crude oil prices settled at $78.25 per barrel after falling $0.29. The dollar and gold prices closed higher.

The Nasdaq and the S&P 500 reached new record highs last Friday. The Nasdaq gained 1.1% to lead the benchmark indexes listed here, followed by the Russell 2000 (1.0%), the S&P 500 (0.8%), the Global Dow (0.6%), and the Dow (0.2%). Ten-year Treasury yields fell 7.2 basis points to end the day at 4.18%. The dollar dipped lower while gold prices rose 1.8%. Crude oil prices gained $1.47 to reach $79.80 per barrel.

Stock Market Indexes

Market/Index	2023 Close	Prior Week	As of 3/1	Weekly Change	YTD Change
DJIA	37,689.54	39,131.53	39,087.38	-0.11%	3.71%
Nasdaq	15,011.35	15,996.82	16,274.94	1.74%	8.42%
S&P 500	4,769.83	5,088.80	5,137.08	0.95%	7.70%
Russell 2000	2,027.07	2,016.69	2,076.39	2.96%	2.43%
Global Dow	4,355.28	4,515.13	4,539.46	0.54%	4.23%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	4.26%	4.18%	-8 bps	32 bps
US Dollar-DXY	101.39	103.96	103.88	-0.08%	2.46%
Crude Oil-CL=F	$71.30	$76.56	$79.80	4.23%	11.92%
Gold-GC=F	$2,072.50	$2,045.30	$2,092.40	2.30%	0.96%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

Gross domestic product (GDP) grew at an annualized rate of 3.2% in the fourth quarter of 2023, according to the second estimate. In the third quarter, GDP increased 4.9%. Compared to the third quarter of 2023, the deceleration in GDP in the fourth quarter primarily reflected a downturn in private inventory investment and slowdowns in federal government spending, residential fixed investment, and consumer spending. Imports, which are a negative in the calculation of GDP, decelerated. The personal consumption expenditures (PCE) price index increased 1.8%, an upward revision of 0.1 percentage point. Excluding food and energy prices, the PCE price index increased 2.1%, an upward revision of 0.1 percentage point. Personal consumption expenditures rose 3.0% in the fourth quarter, compared to a 3.1% advance in the third quarter.
Personal income rose 1.0% in January, while consumer spending inched up 0.2%, down from December’s 0.7% increase. The personal consumption expenditures price index, a noted measure of inflation, rose 0.3% in January after ticking up 0.1% (revised) in December. However, the 12-month rate rose 2.4%, down from 2.6% for the year ended in December, and closer to the Federal Reserve’s goal of 2.0% inflation. Core prices, less food and energy, advanced 0.4% in January (0.1% in December) and 2.8% for the year ended in January (2.9% for the 12 months ended in December).
Sales of new single-family homes rose 1.5% in January, a pace that was slightly below expectations. Since January 2023, sales rose 1.8%. The median sales price of new single-family houses sold in January was $420,700 ($413,100 in December). The average sales price was $534,300 ($493,400 in December). Inventory of homes for sale stood at an 8.3-month supply in January, the same as in December.
New orders for manufactured durable goods decreased 6.1% in January, marking the third monthly decline out of the last four months. Excluding transportation, new orders decreased 0.3%. Excluding defense, new orders decreased 7.3%. Transportation equipment, also down three of the last four months, led the decrease, falling 16.2%.
The international trade in goods deficit was $90.2 billion in January, up $2.3 billion, or 2.6%, from $87.9 billion in December. Exports of goods for January were $170.4 billion, $0.4 billion, or 0.2%, more than December exports. Imports of goods for January were $260.6 billion, $2.7 billion, or 1.1%, more than December imports.
Manufacturing accelerated in February for the second straight month, according to the S&P survey of purchasing managers. The February S&P Global US Manufacturing Purchasing Managers’ Index™ was 52.2, up from 50.7 in January. The February reading marked the strongest improvement in operating conditions in the manufacturing sector since July 2022. New orders grew at the fastest pace in 21 months, while export orders expanded for the first time in three months. Overall, total sales rose at the sharpest pace since May 2022.
The national average retail price for regular gasoline was $3.249 per gallon on February 26, $0.020 per gallon less than the prior week’s price and $0.093 per gallon less than a year ago. Also, as of February 26, the East Coast price decreased $0.026 to $3.204 per gallon; the Midwest price fell $0.024 to $3.098 per gallon; the Gulf Coast price decreased $0.056 to $2.845 per gallon; the Rocky Mountain price advanced $0.060 to $2.982 per gallon; and the West Coast price increased $0.025 to $4.082 per gallon.
For the week ended February 24, there were 215,000 new claims for unemployment insurance, an increase of 13,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended February 17 was 1.3%, an increase of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended February 17 was 1,905,000, an increase of 45,000 from the previous week’s level, which was revised down by 2,000. States and territories with the highest insured unemployment rates for the week ended February 10 were New Jersey (2.8%), Rhode Island (2.7%), Minnesota (2.5%), Massachusetts (2.4%), California (2.3%), Illinois (2.3%), Montana (2.1%), Alaska (2.0%), New York (2.0%), Pennsylvania (2.0%), and Washington (2.0%). The largest increases in initial claims for unemployment insurance for the week ended February 17 were in Oklahoma (+1,802), Ohio (+915), Tennessee (+490), Iowa (+387), and the District of Columbia (+198), while the largest decreases were in California (-8,980), Kentucky (-3,671), Michigan (-1,905), New York (-1,643), and Illinois (-1,431).

Eye on the Week Ahead

The employment sector is front and center this week with the releases of the latest Job Openings and Labor Turnover Survey and the employment situation. The numbers of job openings, hires and separations have been relatively consistent over the past few months and are expected to stay in line with recent trends. On the other hand, employment rose by an unexpectedly high 353,000 in January, which, when coupled with upward revisions for November and December, shows the employment sector has remained strong.

Monthly Market Review – February 2024

Published on March 1, 2024 by dredheadz

The Markets (as of market close February 29, 2024)

Stocks ended February on a high note as each of the benchmark indexes listed here closed up. The Nasdaq and the S&P 500 notched all-time highs, as tech shares, particularly those linked to AI, helped drive stocks. Inflation data released at the end of the month, was in line with expectations, which also supported stocks. February’s gains marked the fourth straight month of advances for the S&P 500, the Dow, and the Nasdaq. For the year, the Nasdaq and the S&P 500 have risen about 7.0%, while the small caps of the Russell 2000 recouped losses from January.

Inflationary data showed price pressures remained marginally elevated, driven higher by rising prices for services. However, the rate of growth for the 12 months ended in February slowed, according to the personal consumption expenditures price index (see below), which rose 2.4%, nearing the 2.0% target set by the Federal Reserve. The U.S. economy, as measured by gross domestic product, continued to show strength in the fourth quarter of 2023 (see below). Consumer spending was solid reflecting greater confidence that inflation is coming down leading to increased spending power, especially where incomes are also rising.

The most recent inflation data showed prices inched higher in January for the second straight month. Both the Consumer Price Index (CPI) and the personal consumption expenditures price index increased in January. However, the 12-month rate for the CPI was unchanged for the year ended in January, while the PCE price index declined 0.2 percentage point.

Job growth vaulted higher in January (see below). In addition, both December and November were revised higher, adding 126,000 new jobs. Wages continued to rise, increasing 4.5% over the last 12 months. New unemployment claims decreased from a year ago, while total claims paid increased (see below).

With most of the reporting for fourth-quarter corporate earnings completed, the earnings growth rate for S&P 500 was 3.2%, marking the second straight quarter of year-over-year earnings growth, according to FactSet. The growth rate for revenue for the S&P 500 for the fourth quarter was 4.0%. While this is below both the five-year and the 10-year averages, growth in the fourth quarter marks the 13th consecutive quarter of revenue growth for the S&P 500. Eight of the 11 sectors reported revenue growth in the fourth quarter, with utilities, materials, and energy declining.

Sales of both new and existing homes increased in January, as inventory increased somewhat and mortgage rates decreased.

Industrial production ticked lower in January after no growth in December. Manufacturing declined 0.5% in January and 0.9% since January 2023. According to the latest survey from the S&P Global US Manufacturing Purchasing Managers’ Index™, the manufacturing sector saw improvement in January for the first time since April 2023. The services sector saw business accelerate to a seven-month high in January.

All 11 market sectors ended January higher, led by industrials and materials. In fact, only real estate, communication services, utilities, and energy failed to advance at least 3.0%.

Bond yields gained as bond prices declined in January. Ten-year Treasury yields generally closed the month higher. The 2-year Treasury yield rose nearly 43.0 basis points to about 4.62% in February. The dollar inched higher against a basket of world currencies. Gold prices rode a topsy-turvy month, ultimately closing lower. Crude oil prices advanced in January on the heels of production cuts and shipping interruptions in the Middle East. The retail price of regular gasoline was $3.249 per gallon on February 26, $0.154 above the price a month earlier but $0.093 lower than a year ago.

Stock Market Indexes

Market/Index	2023 Close	Prior Month	As of February 29	Monthly Change	YTD Change
DJIA	37,689.54	38,150.30	38,996.39	2.22%	3.47%
Nasdaq	15,011.35	15,164.01	16,091.92	6.12%	7.20%
S&P 500	4,769.83	4,845.65	5,096.27	5.17%	6.84%
Russell 2000	2,027.07	1,947.34	2,054.84	5.52%	1.37%
Global Dow	4,355.28	4,375.95	4,508.75	3.03%	3.52%
fed. funds target rate	5.25%-5.50%	5.25%-5.50%	5.25%-5.50%	0 bps	0 bps
10-year Treasuries	3.86%	3.96%	4.25%	29 bps	39 bps
US Dollar-DXY	101.39	103.55	104.13	0.56%	2.70%
Crude Oil-CL=F	$71.30	$75.76	$78.32	3.38%	9.85%
Gold-GC=F	$2,072.50	$2,057.90	$2,052.10	-0.28%	-0.98%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.

Latest Economic Reports

Employment: Total employment increased by 353,000 in January following an upwardly revised December total of 333,000 new jobs. Employment trended up in professional and business services, health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry. Employment increased by an average of 255,000 per month in 2023. Overall, in 2023 total employment was revised up by 359,000. In January, the unemployment rate was unchanged at 3.7% but was 0.3 percentage point higher than the rate a year earlier. The number of unemployed persons declined by 144,000 to 6.1 million but was 405,000 above the January 2023 figure. In January, the number of long-term unemployed (those jobless for 27 weeks or more), at 1.3 million, was little changed from December and accounted for 20.8% of all unemployed people. The labor force participation rate, at 62.5%, was unchanged from the December figure, while the employment-population ratio, at 60.2%, ticked up 0.1 percentage point. In January, average hourly earnings increased by $0.19, or 0.6%, to $34.55. Since January 2023, average hourly earnings rose by 4.5%. The average workweek decreased by 0.2 hour to 34.1 hours in January, and was down 0.5 hours over the last 12 months.
There were 215,000 initial claims for unemployment insurance for the week ended February 24, 2024. During the same period, the total number of workers receiving unemployment insurance was 1,905,000. A year ago, there were 221,000 initial claims, while the total number of workers receiving unemployment insurance was 1,718,000.
FOMC/interest rates: The Federal Open Market Committee did not meet in February after maintaining the target range for the federal funds rate at the current 5.25%-5.50% following its meeting in January.
GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 3.2% in the fourth quarter, according to the second estimate. GDP increased 4.9% in the third quarter. Compared to the third quarter, personal consumption expenditures dipped from 3.1% to 3.0%. Fixed investment rose 2.5%, a 0.1 percentage point decline from the third quarter. Nonresidential fixed investment rose 1.0 percentage point to 2.4%, while residential fixed investment fell 3.8 percentage points to 2.9%. Exports increased from 5.4% to 6.4%. Imports decreased from 4.2% to 2.7%. Government spending decreased 1.6 percentage points to 4.2%. Consumer spending, as measured by the personal consumption expenditures index, rose 3.0% in the fourth quarter, down from 3.1% in the previous quarter. The personal consumption expenditures price index increased 1.8% in the fourth quarter, compared with an increase of 1.7% in the third quarter.
January saw the federal budget deficit come in at $22.0 billion, down roughly $107.0 billion from the December 2023 deficit. The deficit for the first four months of fiscal year 2024, at $531.9 billion, is roughly $70.0 billion higher than the first four months of the previous fiscal year. So far in fiscal year 2024, total government receipts were $1.6 trillion ($1.5 trillion in 2023), while government outlays were $2.1 trillion through the first four months of fiscal year 2024, compared to $1.9 trillion over the same period in the previous fiscal year.
Inflation/consumer spending: According to the latest personal income and outlays report, personal income rose 1.0% in January (0.3% in December), while disposable personal income increased 0.3% in January, unchanged from the prior month. The notable advance in personal income in January reflects increases in minimum wages in several states and the annual cost of living increase for Social Security recipients. Consumer spending advanced 0.2% in January after increasing 0.7% the previous month. Consumer prices climbed 0.3% in January after inching up 0.1% in December. Excluding food and energy (core prices), consumer prices rose 0.4% in January, 0.3 percentage point above the December advance. Consumer prices rose 2.4% since January 2023, 0.2 percentage point less than the advance for the 12 months ended in December. Core prices increased 2.8% over the same period, 0.1 percentage point lower than the year ended in December.
The Consumer Price Index rose 0.3% in January after ticking up 0.2% in December. Over the 12 months ended in January, the CPI rose 3.1%, down 0.3 percentage point from the period ended in December. Excluding food and energy prices, the CPI rose 0.4% in January, up 0.1 percentage point from the previous month, and 3.9% from January 2023, unchanged from the 12-month period ended in December. The January increase was the largest since September 2023. Prices for shelter, up 0.6%, continued to rise in January, contributing to over two-thirds of the monthly all items increase. Energy fell 0.9% over the month, due in large part to a 3.3% decrease in gasoline prices and a 4.5% drop in prices for fuel oil. Food prices increased 0.4% in January.
Prices that producers received for goods and services rose 0.3% in January after falling 0.1% in December. Producer prices increased 0.9% for the 12 months ended in January, down 0.1 percentage point from the 12 months ended in December. Producer prices less foods, energy, and trade services inched up 0.6% in January (0.2% in December), while prices excluding food and energy increased 0.5%. For the 12 months ended in January, prices less foods, energy, and trade services moved up 2.6%, a 0.1 percentage point increase over the 12 months ended in December. Prices less foods and energy increased 2.0% for the year ended in January (1.8% for the period ended in December). In January, prices for food fell 0.3% for the month and 3.6% for the year. Energy prices were down 1.7% in January.
Housing: Sales of existing homes rose 3.1% in January from December. However, sales were down 1.7% from January 2023. The median existing-home price was $379,100 in January, lower than the December price of $381,400 but higher than the January 2023 price of $360,800. Unsold inventory of existing homes represented a 3.0-month supply at the current sales pace, down slightly from 3.1 months in December but above the 2.9-month supply in January 2023. Sales of existing single-family homes increased 3.4% in January but declined 1.4% for the year. The median existing single-family home price was $383,500 in January, down marginally from $385,800 in December but above the January 2023 price of $365,400. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.77% as of February 15, up from 6.64% the previous week and 6.32% one year ago.
New single-family home sales increased in January, climbing 1.5% from December’s total. Sales were up 1.8% from January 2023. The median sales price of new single-family houses sold in January was $420,700 ($413,100 in December). The January average sales price was $534,300 ($493,400 in December). The inventory of new single-family homes for sale in January represented a supply of 8.1 months at the current sales pace, down from 9.2 months in December.
Manufacturing: Industrial production edged down 0.1% in January after being unchanged in the previous month. Manufacturing output declined 0.5% in January after ticking up 0.1% in December. Mining fell 2.3%, while utilities jumped 6.0% as demand for heating surged as milder December weather preceded colder temperatures in January. Over the past 12 months ended in January, total industrial production was identical to its year-earlier reading. For the 12 months ended in January, manufacturing decreased 0.9%, utilities increased 9.0%, while mining fell 1.2%.
New orders for durable goods fell 6.1% in January following a 0.3% decrease in December. New orders for durable goods fell 0.8% since January 2023. Excluding transportation, new orders declined 0.3% in January. Excluding defense, new orders decreased 7.3%. New orders for transportation equipment dropped 16.2% in January, while new orders for nondefense aircraft and parts plunged 58.9%.
Imports and exports: U.S. import prices advanced 0.8% in January following a 0.7% decline in the previous month. The January increase was the first one-month rise in import prices since September 2023 and the largest monthly advance since March 2022. Despite the January increase, U.S. import prices fell 1.3% over the past year and have not risen on a 12-month basis since January 2023. Prices for import fuel rose 1.2% in January following a 7.7% drop in December. Import fuel prices fell 10.0% from for the 12 months ended in January. Prices for nonfuel imports increased 0.7% in January after being unchanged in December. Nonfuel imports fell 0.3% since January 2023. Export prices advanced 0.8% in January after falling 0.7% in December. The January increase was the first monthly increase in export prices since September 2023. Higher nonagricultural export prices in January more than offset lower agricultural prices. Despite the January increase, U.S. export prices decreased 2.4% over the past 12 months.
The international trade in goods deficit was $90.2 billion in January, up $2.3 billion, or 2.6%, from December. Exports of goods were $170.4 billion in January, 0.4$ billion, or 0.2%, less than in December. Imports of goods were $260.6 billion in January, $2.7 billion, or 1.1%, more than in December. Since January 2023, exports declined 2.9%, while imports fell 1.8%.
The latest information on international trade in goods and services, released February 7, is for December and revealed that the goods and services trade deficit was $62.2 billion, up $0.3 billion from the November deficit. December exports were $258.2 billion, 1.5% more than November exports. December imports were $320.4 billion, 1.3% more than November imports. For 2023, the goods and services deficit decreased $177.8 billion, or 18.7%, from 2022. Exports increased $35.0 billion, or 1.2%. Imports decreased $142.7 billion, or 3.6%.
International markets: Most countries continued to monitor inflationary pressures. Germany saw its rate of price increases slow to 2.5% in February, down from 2.9% in the previous month and more than market expectations. Elsewhere, Canada’s annual inflation rate fell from 3.4% to 2.9%, the Eurozone saw inflation tick down from 2.9% to 2.8%, while the rate of inflation in the United Kingdom remained unchanged at 4.0%. Japan’s consumer prices rose 2.2% for the 12 months ended in January, the slowest pace of growth since March 2022. For February, the STOXX Europe 600 Index rose 2.4%; the United Kingdom’s FTSE gained 0.4%; Japan’s Nikkei 225 Index gained 8.8%; and China’s Shanghai Composite Index rose 8.8%.
Consumer confidence: Consumer confidence declined in February after three consecutive months of increases. The Conference Board Consumer Confidence Index® decreased in February to 106.7, following a downwardly revised 110.9 reading in January. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell back to 147.2 in February, down from 154.9 in the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, slipped to 79.8 in February, down from a revised 81.5 in January.

Eye on the Month Ahead

Economic data throughout the first two months of the year has been generally solid. However, the upward movement of inflation cooled any expectations of the Federal Reserve lowering interest rates when it meets in March.