2024 MARKET INSIGHTS
Monthly Market Roundup | U.S. Equities
Big Movers In March 2024
Micron Technology (MU): The semiconductor maker beat estimates and raised guidance after AI applications fueled demand for high bandwidth memory.
Lululemon Athletica (LULU): The athletic apparel company forecast sales below consensus amid weakening demand.
Freeport-McMoRan (FCX): The copper company rallied as Chinese smelters reduced production of the metal, boosting prices.
Southwest Airlines (LUV): The airline cut its outlook and planned capacity amid problems with Boeing aircraft.
Valero Energy (VLO): The oil refiner benefited from strong demand and tight gasoline inventories.
Zoetis (ZTS): The supplier of animal medicines continued lower after issuing weak results and guidance on 13 February.
Key Economic Events Last Month
Jerome Powell ‘Not Far’ from Rate Cuts
The Federal Reserve chair told lawmakers the central bank wants more confidence that inflation is moving sustainably toward 2%, but added that he’s “not far” from that belief. (7/3) Two weeks later, the Fed projected three rate cuts in 2024.
Job Growth Beats, Wages Moderate
Non-farm payrolls increased by 275,000 in February, beating estimates for growth of 200,000. Unemployment was higher than expected and wages grew by 0.1%, missing the 0.3% forecast. That may reflect moderate inflationary pressures. (8/3)
Inflation Slightly Exceeds Consensus
The Consumer Price Index (CPI) rose 0.4% in February, matching estimates. However it was slightly higher than expected excluding food and energy. Shelter, airline fares and auto insurance drove the increase. (12/3)
Housing Makes a Comeback
NAHB’s homebuilder sentiment unexpectedly turned positive amid strong demand for residences. (18/3) Housing starts and building permits also surprised to the upside a day later.
Key Futures Contracts
| Product Name | Current Month | Expiration | Next Month | 1-Mon% |
|---|---|---|---|---|
| S&P 500 E-Mini (@ES) | ESM24 (Jun) | 21 Jun 24 | ESU24 (Sep) | +2.7% |
| *S&P 500 E-Mini Micro (@MES) | MESM24 (Jun) | 21 Jun 24 | MESU24 (Sep) | +2.7% |
| Nasdaq-100 E-Mini (@NQ) | NQM24 (Jun) | 21 Jun 24 | NQU24 (Sep) | +0.8% |
| *Nasdaq-100 E-Mini Micro (@MNQ) | MNQM24 (Jun) | 21 Jun 24 | MNQU24 (Sep) | +0.8% |
| Dow Jones E-Mini (@YM) | YMM24 (Jun) | 21 Jun 24 | YMU24 (Sep) | +1.8% |
| *Dow Jones E-Mini Micro (@MYM) | MYMM24 (Jun) | 21 Jun 24 | MYMU24 (Sep) | +1.8% |
* Micro contracts are one-tenth the size of standard e-minis.
Events to Watch This Month
| Date | Event | What to Watch |
|---|---|---|
| Fri, 5-Apr | Employment report | Hiring and wage trends in February |
| Wed, 10-Apr | Consumer price index (CPI) | Inflation trends |
| Fri, 12-Apr | Earnings season begins | JPMorgan Chase (JPM), Citi (C) and Wells Fargo (WFC) report earnings. |
| Mon, 15-Apr | Retail sales | The strength of consumer spending |
| Thu, 25-Apr | Gross domestic product | The government issues its initial estimate of economic growth between January and March. |
Sector Watch
Energy was the top sector last month amid tight inventories and optimism about stronger economic growth.
Materials outperformed as investors positioned for interest-rate cuts and stronger economic growth.
Utilities bounced on improved fundamentals and optimism about interest-rate cuts.
Consumer discretionaries declined fractionally, dragged lower by Tesla.
Noteworthy Calls & Predictions
FactSet estimated that the S&P 500 could rally toward 5,589 this year, based on analyst price targets for companies in the index. The bottom-up analysis detected the greatest potential upside in health care and real estate.
S&P 500The S&P 500 could reach 6,000 this year, according to Goldman Sachs strategist David Kostin. He said the rally would require strong fundamental performances from large technology companies. He added that valuations remain far from “bubble territory.”
S&P 500Oppenheimer Chief Investment Strategist John Stoltzfus raised his target on the S&P 500 from 5,200 to 5,500. He cited improving earnings and the potential for bearish investors to grow more positive. Stoltzfus added the target may need to increase later in the year.
S&P 500The Russell 2000 index could rise 50 percent this year, according to Tom Lee of Fundstrat. He cited the growth potential of small caps and lower valuations relative to large companies.
Russell 2000Businesses are getting more confident in sales growth and hiring, according to a Bespoke analysis of monthly survey data from the Atlanta Federal Reserve. The improvement ends more than two years of declines.
U.S. economyDisclosure
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