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Wall Street got off to a fast start to begin 2024. Investors were encouraged by strength in the economy, the likelihood of interest rate cuts, possibly beginning in June, and opportunities in artificial intelligence. Each of the benchmark indexes listed here posted solid first-quarter gains led by the S&P 500 and the Nasdaq. Several indexes reached new highs throughout the quarter. The S&P 500 hit its first record high in two years late in January, leading to its best first-quarter performance since 2019. The Federal Reserve provided encouraging news following its meeting in March as it projected three interest rate cuts by the end of the year. Ten-year Treasury yields stayed around 4.20% for most of the quarter, up from 3.86% at the close of 2023. Roughly 76.0% of S&P 500 companies reported fourth-quarter corporate earnings that exceeded analysts' expectations. Some of the "Magnificent Seven" megacap stocks stumbled a bit in the first quarter. Nevertheless they were responsible for nearly 40.0% of the S&P 500's year-to-date gain, which is down from over 60.0% last year. Ten of the 11 market sectors posted quarterly gains, with industrials, information technology, communication services, financials, and energy climbing more than 10.0%.
The U.S. dollar underwent several ups and downs, ultimately closing the first quarter higher. Gold prices
advanced to reach record highs. Crude oil prices, which began the year at about $71.00 per barrel, climbed nearly 16.0% to over $82.00 per barrel as oil exporting countries cut back on supplies. Home mortgage rates began the year at about 6.62% for the 30-year fixed rate, according to Freddie Mac. Rates jumped as high as 6.94% at the end of February, before falling to 6.79% at the end of March. The retail price for regular gasoline was $3.523 per gallon on March 25, $0.027 above the February 26 price and $0.407 higher than the price three months earlier. Regular retail gas prices increased $0.102 from a year ago. Gold prices declined in the third quarter, nearing a seven-month low.
January saw stocks get off to a slow start as investors took some recent gains, particularly from tech shares and moved into sectors that lagged in 2023, including consumer staples, health care, and energy. By the end of the month, each of the benchmark indexes listed here posted gains, with the exception of the Russell 2000. Inflation data showed prices inched higher, with the Consumer Price Index (CPI) and the personal consumption expenditures (PCE) price index increasing, both monthly and annually. The Federal Reserve met in January and maintained the federal funds target rate range at 5.25%-5.50%. The economy proved resilient in January, despite the ongoing war in Ukraine and the turmoil in the Middle East. Gross domestic product rose 3.2%, while personal consumption expenditures, a measure of consumer spending, rose 3.0%. Job growth remained steady, while industrial production inched higher. All 11 market sectors ended January higher, led by industrials and materials. Bond returns were slightly negative, with yields on 10-year Treasuries inching up 10.0 basis points.
Large-cap stocks advanced for the fourth consecutive month in February. Several of the benchmark indexes listed here reached record highs, with the S&P 500 off to its strongest start to a year since 2019. Value stocks and small caps also enjoyed a favorable month. Among the benchmark indexes listed here, the Nasdaq and the Russell 2000 led the way. In contrast, bond values dipped lower, pushing yields up. The economy continued to expand, despite operating in the highest interest-rate environment in nearly 20 years. The CPI and PCE price index climbed higher as inflationary pressures continued to prove stubborn. However, the annual rates for both indexes declined. Retail sales dropped 0.8%, pulled lower by declines in sales for motor vehicles and parts and gasoline stations. Job gains were robust, adding more than 300,000 new jobs. Investors' hopes for an interest rate reduction waned on stubborn inflationary pressures, coupled with strength in the labor market and the economy.
March continued the bull run for stocks. Each of the benchmark indexes listed here advanced, with the Global Dow, the Russell 2000, and the S&P 500 each gaining over 3.0%. Utilities, financials, materials, and energy led the market sectors in March. Consumer spending and gross domestic product expanded in March. Inflationary pressures continued to increase as the Consumer Price Index rose 0.4% for the month and 3.2% for the year. Producer prices rose 0.6%, more than double most analysts' expectations. Overall, price pressures remained firmer than expected. Crude oil prices rose nearly 6.0%, while prices at the pump increased by about $0.274 for a gallon of regular gasoline.
MARKET/INDEX | 2023 CLOSE | AS OF MARCH 29 | MONTHLY CHANGE | QUARTERLY CHANGE | YTD CHANGE |
---|---|---|---|---|---|
DJIA | 37,689.54 | 39,807.37 | 2.08% | 5.62% | 5.62% |
NASDAQ | 15,011.35 | 16,37946 | 1.79% | 9.11% | 9.11% |
S&P 500 | 4,769.83 | 5,254.35 | 3.10% | 10.16% | 10.16% |
RUSSELL 2000 | 2,027.07 | 2,124.55 | 3.39% | 4.81% | 4.81% |
GLOBAL DOW | 4,355.28 | 4,676.17 | 3.71% | 7.37% | 7.37% |
FED. FUNDS | 5.25%-5.50% | 5.25%-5.50% | 0 bps | 0 bps | 0 bps |
10-YEAR TREASURIES | 3.86% | 4.20% | -5 bps | 34 bps | 34 bps |
US DOLLAR-DXY | 101/39 | 104.55 | 0.40% | 3.12% | 3.12% |
CRUDE OIL-CL=F | $71.30 | $83.06 | 6.05% | 16.49% | 16.49% |
GOLD-GC=F | $2,072.50 | $2,244.70 | 9.39% | 8.31% | 8.31% |
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
The second quarter of 2024 will likely focus on election campaign rhetoric, first-quarter corporate earnings, and the ongoing turmoil in Ukraine and the Middle East. Investors will be watching for an interest rate reduction by the Federal Reserve, possibly in June.
Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); http://www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.
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