Stock Market News From March 6, 2024: Dow, S&P 500 Rise; Powell Testimony; CrowdStrike, Nordstrom, JD com, Nvidia, Tesla, and More Movers; Bitcoin, Gold Chase Record Highs
At its last meeting in January, the Federal Open Market Committee opted to maintain interest rates at their current range of 5.25% to 5.5%, its highest target range in 22 years. Economists are expecting the FOMC to continue to maintain interest rates at current levels at its next meeting that concludes on March 20. Inflation, interest rates and the labor market will likely continue to dominate Wall Street headlines in March. Meanwhile, fourth-quarter earnings numbers have been better than expected as companies are effectively managing rising costs and interest rates that are at 22-year highs.
This considers what is expected to be something of a bumpy ride through the rest of the year where the labor market can still soften, but sets up a stronger “recovery” looking out towards 2024 that can be positive for stocks. It’s been a good start to the year for stock market investors with the S&P 500 (SPX) up more than 7%, and well above the cycle lows. This follows a historically difficult 2022 with the index ending more than -18% lower which featured some extreme volatility.
Whirlpool’s Q4 sales was hurt by the sluggish demand environment and adverse price/mix, mainly in Europe and North America. Perrigo’s businesses continue to be impacted by pricing and other macro-economic pressures. Intense competition from major players within the industry is a perennial challenge for the company.
Dolby Laboratories(DLB Quick QuoteDLB) Downgraded: 03/02/24
FedWatch data suggests that there will probably be no cut at the May meeting, either — but the odds aren’t quite as slim as for March, at the time of writing. As of late February, FedWatch is showing a probability of less than 3% that the Fed will cut rates in March. David Bahnsen, chief investment officer at The Bahnsen Group, says the recent enthusiasm for tech stocks reminds him of the dot com bubble https://www.day-trading.info/ and investors should tread carefully. “The Fed minutes are showing that we’re still likely a few meetings away from a rate cut,” Swanke says. Most of that though has already been priced into markets, according to Ian Shepherdson, the chief economist of Pantheon Macroeconomics. US stocks rose on Wednesday as traders took in Federal Reserve Chair Jerome Powell’s prepared remarks before Congress.
It’s possible that some investor or economist could discover an easy and reliable sector rotation method in the future, but they haven’t figured one out yet. But the actual market effects of interest rate decisions are more complex, because investors tend to “price in” their expectations of what will happen ahead of time. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Another dot plot is due after the March meeting, and if the median FOMC estimate for end-of-2024 interest rates is even lower, that could imply that the timetable for rate cuts has accelerated. The report comes ahead of the closely watched nonfarm payroll report on Friday. A lower reading than January’s blowout https://www.forex-world.net/ number could help fuel bets for near-term rate cuts from the central bank. As part of the bullish case, a scenario where economic conditions continue to outperform should be positive with companies benefiting from stronger underlying demand, and we could even see some revisions to estimates higher.
How might falling interest rates affect markets?
Things really start to get interesting when you look at the probabilities for the June meeting, however. At the time of writing, FedWatch gives the Fed a 51% chance of cutting rates by 25 basis points — and a 12% chance of cutting them by 50 basis points. The Labor Department reported the U.S. economy added 353,000 jobs in January, far exceeding economist estimates of 185,000 new jobs. December and January represent the first time the U.S. has reported back-to-back months adding more than 300,000 jobs since June and July of 2022. The bond market is pricing in just a 3.0% chance the FOMC will cut rates at its March meeting.
- We believe everyone should be able to make financial decisions with confidence.
- They just don’t know exactly when — but at the moment, the odds point toward June 12.
- The shares included in it are weighted according to price; the index level represents the average of the shares included in it.
- Although the Fed wants to see inflation cool further, it said it doesn’t need to fall to its 2% target for rate cuts to be possible.
ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. The fact that sector rotation ETFs underperform the S&P 500 is not the only mark against sector rotation strategies. In a widely cited 2007 paper, economists at Massey University in New Zealand examined U.S. stock returns between 1948 and 2006.
However, the market is pricing in a 66.1% chance the FOMC will cut interest rates by at least 25 basis points by June. Although the Fed wants to see inflation cool further, it said it doesn’t need to fall to its 2% target for rate cuts to be possible. Stocks always have risks, but it’s important for investors to not lose track of the big picture and long-term outlook.
You can see the full Zacks #1 Rank List or narrow it down to Zacks #1 Rank Stocks with a Value, Growth, Momentum or Income Style Score of A or B. You can also sort the list with criteria you choose, view Additions and Deletions by day, and Performance. Zacks Rank Home – Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners. Central Garden & Pet has been advancing digital capabilities, optimizing its supply chain, expanding data analytics capability and focusing on marketing activities to better engage with customers. Resumption of the payment of quarterly dividend highlights its shareholder-friendly stance.
Beyond a correction lower to commodity and energy prices, and easing supply chain conditions, trends in core categories are seen slowing. Over the next few months, the CPI index will begin hitting tough year-over-year comps pushing the annual rate even lower. This narrative was part of the message from Fed Chairman Powell at the February Fed meeting pointing to the disinflation process while recognizing the process is not completely over yet. The data have worked to brush aside the scenario that the U.S. economy was facing a so-called “hard landing”, defined by a deepening recession bringing back parallels to the financial crisis back in 2008.
Stock market today: US stocks rise as Powell comments give sparse update on rate outlook
The company is investing in growth, innovation, cost savings and automation. Block’s comprehensive commerce ecosystem, accelerated business growth and entry into bitcoin space remain major positives. Gas futures have risen on recent announcements of production cuts by major producers, although mild temperatures have reined in demand. New York Community Bancorp upstaged Powell’s https://www.forexbox.info/ testimony for traders—bond yields retreated on a report it was seeking a cash infusion. But they stabilized as the stock surged back in the wake of a $1 billion investment from a group that includes Liberty Strategic Capital, Hudson Bay Capital, and Reverence Capital. So sector rotation may not be a silver bullet, at least with the sector rotation methods we have today.
If we think back to the pretext when the S&P 500 was trading under the $3,600 level last June, there’s a lot less uncertainty today which is a good backdrop for stocks. To summarize, federal funds futures markets are almost certain an interest rate cut is coming soon. They just don’t know exactly when — but at the moment, the odds point toward June 12. In the Fed’s January meeting minutes, officials noted they will not be comfortable cutting interest rates until they have “greater confidence” inflation is still declining. In addition, FOMC members highlighted the “risks of moving too quickly” on rate cuts. A strategy that includes a well-diversified portfolio across equities and fixed income with a long-term time horizon can drive capital appreciation over time.
Mr. Duggan is also the author of the book “Beating Wall Street With Common Sense” and has contributed news and analysis to U.S. News & World Report, Seeking Alpha, InvestorPlace.com and The Motley Fool. Mr. Duggan is a graduate of the Massachusetts Institute of Technology and resides in Biloxi, Mississippi. The consumer price index, or CPI, gained 3.1% year-over year in January.
It’s possible that years from now we can look back at the events of this time and it will just be remembered as just noise while the stock market is significantly higher. From the price chart, the first step here for the S&P 500 is to climb above the $4,200 level which has worked as an area of technical resistance since last year. As it relates to corporate earnings pending the final few weeks of the Q4 earnings season, the S&P 500 is on track to reach 2022 EPS of $219.51, up 5% year-over-year as a “bottom-up” aggregate of all underlying companies. The good news is that companies have been beating EPS estimates, on average, with a trend of ongoing profitability, going back to that theme of resiliency.
Investors are increasingly optimistic the Federal Reserve will achieve its goal of a soft landing for the U.S. economy. “Ongoing progress toward our 2% inflation objective is not assured,” the statement added. “Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy.” The inclusion of a company in the Dow Jones Industrial Average does not depend on defined criteria. Instead, an independent Wall Street Journal commission decides whether a share is to be included or excluded. There are no fixed times for reviewing the composition of the index, since changes are only made by the commission as and when they are needed.