Broken Week…| March 8, 2024

AUTHOR: Jason Roque, CFP®, APMA®, AWMA®
TITLE:   Investment Adviser Rep – CCO
TAGS: S&P 500, NASDAQ, Tech, Bitcoin, ISM, FRB, Jobs

Markets broke lower for the week, but with some strong up days mixed in. Should more of those be expected?

Monday                       S&P 500 0.12% | NASDAQ 0.41%

Markets wavered late, although a tech rally continued to rage under the surface. There was very little economic data on the day. Bitcoin has been making headlines as it surged to new record highs in recent days. Access to crypto through Exchange Traded Funds has generated additional interest in the market.

Tuesday                       S&P 500 1.02% | NASDAQ 1.65%

ISM Services data slipped more than expected for February. Factory orders also slipped for the month. The tech rally paused as markets wait for the Federal Reserve Board (FRB) chair to testify before congress tomorrow. The tech boom is reliant on a lower rate environment for continued growth.

Wednesday                 S&P 500 0.51% | NASDAQ 0.58%

Job openings continued to show strength. This signals what could be a strong jobs report on Friday. FRB Chair Powell’s testimony before congress aided markets in their rebound. His statements sustained the course of rate cuts later this year under the pressure of lower inflation.

Thursday                     S&P 500 1.03% | NASDAQ 1.51%

Initial jobless claims data continues to show a job market that is holding up under higher interest rates. Weak jobs data would typically signal a down market (right now) as job strength means less need for rate cuts. To the contrary, tech stocks continued their rally considering favorable testimony from the FRB chair.

Friday                          S&P 500 0.65% | NASDAQ 1.16%

Happy Jobs Friday! The unemployment rate surprisingly rose to 3.9% even with the economy adding 275K nonfarm payrolls. The job growth was offset by job losses where 6.5M people are currently unemployed. Continued strength in the jobs market sent markets lower. 3.9% unemployment is a step in the right direction, however, 275K job adds is not a weak job market…

Conclusion                  S&P 500 0.26% | NASDAQ 1.17%

Our two up days of the week came while the FRB was testifying before congress. If this were 2022 the performance would be quite opposite. However, the tone of the FRB has shifted to a more accommodative stance. Markets eagerly await the FRB’s first rate cut. Market activity for the week includes data on CPI, PPI, Retail Sales, Jobs data, and Consumer Sentiment. All of which will help clarify the future stance of the FRB.

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