
Isaac Cockfield
The CFO


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isaac.cockfield@lpl.com

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678-662-7036

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https://thecfoadvisors.com
Zack started in the financial services industry in 1999 at Merrill Lynch and has worked with many of the same clients for 20 plus years. In 2003, Zack earned the Certified Financial Planner® designation and can meet over Zoom to do an intro meeting.
Weekly Market Performance — March 22, 2024
LPL Research provides its Weekly Market Performance for the week of March 18, 2024. It was a strong week for U.S. equity markets as the S&P 500 eclipsed new all-time highs for the 20th time this year following a fairly upbeat Federal Reserve (Fed) assessment on Wednesday. The FOMC statement and the press conference that followed were an indication to the markets that the Fed remains on track to deliver three rate cuts this year and alleviated some concerns that policy would need to deviate from its intended path after the recent uptick in headline inflation. Bond markets were a bit more skeptical of the policy outlook, however, as yields across the curve were only modestly lower on the week despite the Fed’s reassurance of lower rates.
Stock Index Performance
Index |
Week Ending |
One Month |
Year to Date |
S&P 500 |
2.51% |
3.11% |
9.97% |
Dow Jones Industrial |
2.24% |
1.31% |
5.02% |
Nasdaq Composite |
2.98% |
2.54% |
9.58% |
Russell 2000 |
1.98% |
3.27% |
2.60% |
MSCI EAFE |
1.05% |
3.12% |
5.79% |
MSCI EM |
0.17% |
0.54% |
1.56% |
S&P 500 Index Sectors
Sector |
Week-Ending |
One Month |
Year to Date |
Materials |
1.18% |
6.15% |
6.92% |
Utilities |
1.48% |
4.24% |
0.78% |
Industrials |
3.04% |
5.03% |
10.07% |
Consumer Staples |
0.98% |
2.12% |
5.93% |
Real Estate |
-0.28% |
0.17% |
-3.36% |
Health Care |
0.46% |
-0.88% |
6.78% |
Financials |
2.20% |
3.74% |
10.45% |
Consumer Discretionary |
2.94% |
0.75% |
4.17% |
Information Technology |
3.11% |
3.89% |
14.13% |
Communication Services |
4.71% |
3.97% |
16.36% |
Energy |
1.74% |
7.53% |
10.23% |
Fixed Income and Commodities
Indexes and Commodities |
Week-Ending |
One Month |
Year to Date |
Bloomberg US Aggregate |
0.40% |
0.83% |
-1.33% |
Bloomberg Credit |
0.42% |
0.77% |
-1.00% |
Bloomberg Munis |
-0.18% |
0.38% |
-0.23% |
Bloomberg High Yield |
0.54% |
1.18% |
1.32% |
Oil |
-0.49% |
2.58% |
12.55% |
Natural Gas |
0.06% |
-4.39% |
-34.13% |
Gold |
0.31% |
6.82% |
4.82% |
Silver |
-2.03% |
8.46% |
3.69% |
Source: LPL Research, Bloomberg 03/22/24
Disclosures: Indexes are unmanaged and cannot be invested in directly.
U.S. and International Equities
Markets: The S&P 500 Index moved solidly higher this week as the Fed maintained the status quo, encouraging market participants to continue to embrace risk assets. As of 2 P.M. ET on Friday, the 2.4% gain for the index was its best weekly performance since mid-December. International equities lagged the U.S. in dollar terms but moved higher on the week. The Bank of Japan’s historic, and dovish, rate hike on Tuesday helped drive the Nikkei more than 5% higher in yen terms.
This week’s gains were paced by two key growth sectors: communication services and technology. Communication services leadership was, perhaps predictably, driven by strength in top constituents Google (GOOG/L) and Meta (META) amid ongoing enthusiasm surrounding artificial intelligence (AI). But surprisingly, technology gains came despite weakness in Apple shares (AAPL) after the Justice Department brought an antitrust suit against the company. Among S&P 500 sectors, only real estate was down on the week.
The improved economic and earnings outlooks along with the end of the Fed’s rate-hiking campaign as inflation pressures eased have powered this bull market to a return of about 50% since it began in October of 2022, with 10% coming in 2024. Though valuations are elevated, fundamentals have been good enough to preserve the market’s momentum and keep the uptrend intact.
Fixed Income: The Bloomberg Aggregate Bond Index finished the week higher after the Fed kept rate cuts on the table for 2024. Corporate credit markets rallied on the news as well, but further price appreciation may be limited given the already tight spreads, particularly within the high yield market.
A collaborative take on the changes to the Fed’s rate cut expectations would be that the bond market would not like the news from this week’s Fed meeting. The Fed’s dot plot still showed three cuts this year but, potentially, fewer rate cuts in 2025 and 2026. Additionally, and importantly, the Fed raised its estimate of the neutral fed funds rate from 2.5% to 2.6%, which means we’re not likely going back to very low interest rates. However, going into the meeting, the bond market was priced for worse news, particularly as it relates to the neutral rate. With the Fed likely determined to stay the course on rate cuts, even in the face of inflation still above target, the bond market’s rally this week was likely a sigh of relief that rate cuts are likely still happening this year, which has historically been a tailwind to bond prices. With the rate cycle seemingly turning, it’s likely the cycle highs in rates have been made.
Commodities: Gold captured most of the commodity market spotlight. While the rally slowed a bit this week, the yellow metal’s breakout above key resistance at $2,075 remains a major technical development. Macro conditions remain supportive for gold, including elevated geopolitical tensions and potentially limited upside risk to interest rates and the dollar due to the eventual rate cuts from the Fed. Global central bank demand remains another key factor to gold’s rally and has shown little signs of slowing down. The deviation between gold prices and gold holdings in ETFs appears stretched, raising the probability of a potential rebound in demand from gold-related ETFs.
Oil pulled back modestly but held above $80 a barrel. The extension of OPEC+ production cuts into the second quarter has helped balance out the market and offset record U.S. production. Stockpile drawdowns in the U.S. over the last few weeks have further supported the supply side of the equation. The prospect for global central bank easing and the potential for Chinese demand to return have supported the demand outlook. The futures curve is reflecting a tighter oil market as well, as the curve remains in backwardation. Finally, Ukrainian-led drone strikes on Russian refiners have added to the embedded risk premium in oil, which is further supported by ongoing tensions in the Middle East.
Economic Weekly Highlights
The Bank of Japan (BOJ) kicked off a busy week of policy meetings for central bankers on Tuesday. As expected, the BOJ finally ended the era of negative interest rates after raising their policy rate from -0.1% to a new range of 0.0% to 0.1%. The central bank also halted exchange-traded fund purchases and abandoned their yield curve control program, while noting they would continue to buy long-term sovereign debt as needed. The policy moves were widely expected but lacked any hawkish follow-through commentary as the central bank stressed the “importance of maintaining an accommodative environment in mind.” In buy the rumor, sell the news fashion, the yen weakened after the announcement, sending the dollar/yen higher.
The Federal Reserve left rates unchanged as expected. Policymakers also penciled in three quarter-point cuts this year, but things could change depending on the persistence of services inflation or any emerging risks to growth. Rates may still stay higher for longer. The FOMC seems inclined to keep rates a bit higher in 2025 than originally forecasted. The Fed did not change its headline inflation projections for 2024 but boosted GDP growth expectations from 1.4% to 2.1%. Inflation pressures are cooling and the path toward the 2% goal will be bumpy.
The Week Ahead
The following economic data is slated for the week ahead:
- Monday: New Home Sales (Feb), Dallas Fed Manufacturing Activity (Mar)
- Tuesday: Durable Goods Orders (Feb), Philly Fed Non-Manufacturing (Mar), FHFA House, Price index (Jan), Conf. Board Consumer Confidence (Mar), Richmond Fed Business, Conditions (Mar), Dallas Fed Services Activity (Mar)
- Wednesday: MBA Mortgage Applications (Mar)
- Thursday: GDP (Q4 3rd release), Personal Consumption (Q4 3rd release), Core PCE (Q4 3rd release), Initial and continuing unemployment claims, Chicago PMI (Mar), Pending Home Sales (Feb), Michigan Sentiment (Mar final), KC Fed Manufacturing, Activity (Mar)
- Friday: Holiday
Important Disclosures
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.
Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.
Asset Class Disclosures –
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
Bonds are subject to market and interest rate risk if sold prior to maturity.
Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.
Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.
Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.
Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.
High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.
Precious metal investing involves greater fluctuation and potential for losses.
The fast price swings of commodities will result in significant volatility in an investor’s holdings.
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Jeff Buchbinder
Jeff Buchbinder, CFA, provides the top-down view of the stock market for LPL Financial Research. He has over 25 years of experience in equities.