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THIS WEEK'S UPDATE

| March 04, 2024


Stocks extended their tech-led advance last week as signs of a resilient and still-enthusiastic consumer boosted momentum.
 
Nasdaq Sets New High
Stocks traded in a narrow band early in the week but ended the five-trading sessions with a powerful advance. While the Dow dipped lower, artificial intelligence (AI) names powered the gains in the S&P 500 and the Nasdaq Composite. The Nasdaq bobbed around the 16,000 level for most of the week before posting consecutive record highs on Thursday and Friday, surpassing its 2021 record. It was the last of the three major stock benchmarks to reach a record high this year. Economic news also helped boost markets. The Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, rose 0.3 percent in January versus December—and 2.4 percent on a 12-month basis. Both were in line with expectations. Stocks ticked up on Thursday following the release of the report.
 
Consumers Remain Upbeat
With all the excitement over AI, it’s easy to overlook some key economic indicators that also speak to the underlying strength of the economy—specifically, consumer data. In addition to the closely watched PCE report, an end-of-week consumer survey revealed that while sentiment softened in February, it remained near a 32-month high. Fresh data this week also showed an unexpected jump in personal income. Finally, the PCE report also reflected an ongoing consumer shift from goods to services—a sign the economy continues to normalize after the pandemic. Since two-thirds of gross domestic product comes from consumer spending, these consumer-related metrics helped support the narrative that the economy appears to be gathering momentum.
 
This Week: Key Economic Data
Monday: Motor Vehicle Sales.
Tuesday: Factory Orders. ISM Services Index.
Wednesday: ADP Employment Report. JOLTS. Beige Book.
Thursday: Federal Reserve Chair Jerome Powell Speech. Jobless Claims. International Trade in Goods & Services. Productivity and Costs.
Friday: Employment Situation.
 
This Week: Companies Reporting Earnings
Tuesday: Target Corporation (TGT)
Wednesday: Dollar Tree, Inc. (DLTR), Campbell Soup Company (CPB)
Thursday: Costco Wholesale Corporation (COST), Broadcom Inc. (AVGO), The Kroger Co. (KR)
 
Final Thoughts
Well, it’s a busy week ahead.  Tomorrow is Super Tuesday, the biggest day on the Presidential primary calendar.  Voters in 15 states will cast their votes in Republican Presidential primaries.  Nearly a third of all delegates will be chosen with delegate-heavy states of Texas and California included. Former President Trump is likely to officially wrap up the nomination and become the presumptive nominee.  Former Governor and UN Ambassador Nikki Haley will have a moment of reckoning as the votes are counted Tuesday night.
 
President Biden, though unopposed, should officially reach the delegate count he needs to clinch the nomination. On Thursday he gets an official moment to grab the national spotlight as he gives the State of the Union Address to a joint session of Congress.
 
That’s enough politics, I’m already getting anxiety thinking about it.  
 
As far as the markets go, Fed Chairman Powell testifies before Congress on Thursday about inflation and the state of the economy.  Markets continue their march higher.  The bigger news for the market will come in next week’s CPI (inflation) report for February.  January had a bit of a hot number and a hot number in February could spook markets.  
 
Stay tuned…