Fed Confirms 3 Cuts, Markets Rally – Mar 22 Market Recap
Indices
- Dow 39,475, +761 or +1.97%.
- Nasdaq 16,428 (new record close), +455 or +2.85%.
- MSCI EAFE 2351.57, +26.45 or +1.14%. 2351.57
- S&P 5,234, +117 or +2.29%.
- USD10Y 4.218%, -8.6bp or -2.00%.
- WTI Crude $80.81 bbl, -$0.20 or -0.25%.
Fed Confirms 3 Cuts, Markets Rally
Amongst fears that stubborn inflation data would handcuff the Federal Reserve and force them to revise the number of expected rate cuts to fewer than three in 2024, the Fed instead confirmed that as of their meeting last week, three rate cuts were still in the works of 2024. Markets rallied strongly with all three major U.S. indices setting record closing highs on consecutive days (Wednesday and Thursday).
This Week: Mar 25 – Mar 29
Markets are closed this Friday in observance of Good Friday. However, the holiday won’t stop the Bureau of Economic Analysis from issuing the Fed’s favorites measure of inflation, the Personal Consumption Expenditure.
Earnings are quiet this week with only meme stock, GameStop of interest (although it will have no bearing on the markets).
Economic Calendar
- Monday – N/A. Earnings: N/A
- Tuesday – February Durable Goods Orders, March Consumer Confidence. Earnings: GameStop (GME).
- Wednesday – N/A. Earnings: N/A.
- Thursday – Initial Jobless Claims, Q4 GDP (2nd Revision). Earnings: N/A.
- Friday – U.S. Markets Closed in Observance of Good Friday. February Personal Consumption Expenditure. Earnings: N/A.
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Last Week‘s Daily Trading Recap…
Monday – Dow +75 to 38,790, Nasdaq +130 to 16,103, S&P +32 to 5,149, USD10Y +3.6bp to 4.340%.
- Nine of eleven S&P sectors traded higher today, led by Communication Services, Consumer Staples, and Consumer Discretionary.
- Earnings: Oracle (ORCL) beat their earnings estimates, but revenues were light of expectations. ORCL traded up +13% post close.
Tuesday – Dow +320 to 39,110, Nasdaq +63 to 16,166, S&P +29 to 5,178 (new record close), USD10Y -4.3bp to 4.297%.
- Nine of eleven S&P sectors traded higher today, led by Energy, Utilities, and Consumer Discretionary.
- JW Nordstrom (JWN) popped +9.0% today on news that it is exploring taking itself private. A similar effort failed in 2018.
- Chipotle Mexican Grill (CMG) announced a 50-1 stock split and promptly rallied +4%.
Wednesday – Dow +401 to 39,512 (new record close), Nasdaq +202 to 16,369 (new record close), S&P +46 to 5,224 (new record close), USD10Y -2.4bp to 4.273%.
- Nine of eleven S&P sectors traded higher today, led by Consumer Discretionary, Communication Services, and Financials.
- The Fed, as expected, kept interest rates unchanged but reconfirmed three 2024 rate cuts which was the crucial data point for the markets.
- Earnings: Micron Technology (MU) blew out their earnings expectations, beat on revenues and traded up +16% post close. General Mills (GIS) beat both revenue and earnings estimates; GIS traded up 1.5%.
Thursday – Dow +401 to 38,781 (new record close), Nasdaq +32 to 16,401 (new record close), S&P +17 to 5,241 (new record close), USD10Y -0.2bp to 4.271%.
- Nine of eleven S&P sectors traded higher today, led by Industrials, Finance, and Energy.
- Jobless claims fell to 210,000, vs 212,000 forecast and vs. last week’s slightly revised higher print of 212,000 (originally 209,000).
- The Philadelphia Federal Manufacturing Index was negative but better than expected at -3.2 vs -5.0 expected and vs last month’s +5.2 print.
- March S&P Flash Manufacturing PMI showed improvement at 52.5 vs 51.8 expected and vs last month’s 52.2 print.
- March S&P Flash Services PMI continued to show signs of weakness, declining to 51.7 vs 52 and vs last month’s 52.3.
- Earnings: FedEx (FDX) despite missing their revenue estimates and narrowing their earnings forecast, the global shipping company beat their earnings estimates, and announced a $5 billion share buyback; FDX rallied +13% post close. Apparel and shoemaker, Nike (NKE) beat their earnings and revenue estimates but noted that Chinese sales are slowing; NKE traded down -5.66% in the extended session.
Friday – Dow -305 to 39,475, Nasdaq +27 to 16,428 (new record close), S&P -7 to 5,234, USD10Y -5.3bp to 4.218%.
- Eight of eleven S&P sectors traded down, led lower by Real Estate, Financials, and Consumer Discretionary.
If you know of any friends or family members who could benefit from our services and these types of communiques, we are accepting new clients and offer a complimentary one-hour review.
Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets…Bitcoin, Cardano, Chainlink, Ethereum, ACHR, AVGO, BITB, ETHE and GBTC.