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THIS WEEK'S UPDATE

| March 11, 2024

Stocks were down for the week as investors appeared to take some profits and traders parsed Fed Chair Jerome Powell’s Congressional testimony.
 
Markets Wobble 
Stocks had a rough start to the week, with the Dow, S&P 500, and Nasdaq each off more than one percent on Tuesday alone. Mega-cap tech stocks were under pressure as investors appeared to take some profits. Markets clawed back much of their losses on Wednesday and Thursday, with the Fed Chair’s upbeat comments to the Senate Banking Committee boosting stocks. Chair Powell said that once the Fed was confident inflation was tracking “sustainably at 2%,” the Fed would consider cutting short-term interest rates. The S&P 500 and Nasdaq rallied, with the S&P hitting a record close. Friday's employment news threw some uncertainty into the mix. The economy added 275,000 jobs in February—exceeding the 198,000 expected—but wage growth slowed, and jobless claims edged up. Some investors saw that as a negative, while others viewed it as a “Goldilocks” moment—an economy that’s not too hot or cold. Stocks initially rallied on the news, but profit-takers appeared to arrive as the day progressed.
 
Fed Watch: Productivity
Productivity is one of the critical data points the Fed reviews to determine its next steps with monetary policy. Producing more goods or services with fewer resources helps the economy grow while managing inflation risks. The 3.2 percent productivity gains in Q4 reported last week were mainly attributed to the post-pandemic repair of supply chains. However, investors may hope that artificial intelligence will play a more significant role in productivity increases.
 
This Week: Key Economic Data
Tuesday: Consumer Price Index. Treasury Statement.
Wednesday: EIA Petroleum Status Report.
Thursday: Jobless Claims. Producer Price Index. Retail Sales. Business Inventories.
Friday: Industrial Production. Import and Export Prices. Consumer Sentiment.
 
This Week: Notable Companies Reporting Earnings
Tuesday: Lennar Corporation (LEN, LEN.B)
Wednesday: Dollar Tree, Inc. (DLTR)
Thursday: Oracle Corporation (ORCL), Adobe Inc. (ADBE), DICK’S Sporting Goods, Inc. (DKS), Getty Images Holdings, Inc. (GETY)
 
Final Thoughts
The CPI report tomorrow is apt to move the markets in the near term as interest rates and the potential for rate cuts is what many have been betting on.  Anything to the contrary may overturn the apple cart in the near term.  As you can see from the Truflation report below, inflation has been trending lower, albeit not in a straight line.  There are definitely zigs and zags.  So, there are apt to be months where the number is a little hotter than we’d like.  One or two months is NOT a trend.  Stay tuned…