[Chart courtesy of MarketWatch.com]

1. Moving the markets

The S&P 500 marked a moderate rise today, achieving its strongest first-quarter performance in five years and securing a fifth consecutive month of gains.

The stock market has seen an upward trend for 18 of the past 22 weeks, a streak not surpassed since 1989. While the broader market indexes hovered around the break-even point, the Dow Jones Industrial Average remained flat, and the Nasdaq traded slightly lower.

On a monthly scale, the S&P 500 saw a 3.1% increase. The Nasdaq and the Dow Jones followed suit, with gains of 1.8% and 2.1% for March, respectively. This marks the fifth successive month of gains for all three major indexes.

For the quarter, the S&P 500 surged 10.2%, its best first-quarter leap since 2019’s 13.1% rally. The Dow Jones Industrial Average climbed 5.6%, its most robust first quarter since 2021, when it soared 7.4%. The Nasdaq concluded the quarter with a significant 9.1% rise.

The early 2024 rally propelled major U.S. stock benchmarks to record highs in March, with the S&P 500 reaching an unprecedented closing peak midweek.

Nvidia, last year’s market frontrunner, continued to fuel the quarter’s and month’s gains amid the ongoing artificial intelligence boom, with its stock soaring 82% for the quarter and 14% in March alone. Bitcoin also saw substantial increases, with gains of 68% for the quarter and 31% for the month.

Unemployment insurance initial filings for the week ending March 16 were reported at 210,000, marginally below the anticipated 211,000.

Despite the market closure on Good Friday, key economic data concerning personal income, consumer spending, and personal consumption expenditures will still be released.

The first quarter of 2024 was marked by a significant split between plummeting ‘soft’ surveys and ascending ‘hard’ data. The latter, coupled with persistent inflation and continuous market commentary, led to a dramatic reduction in rate-hike expectations for Q1.

The forecast for Federal Reserve cuts in 2024 plummeted from nearly seven to fewer than three. Nonetheless, this shift did not deter the upward trajectory of stocks, as the disparity between expectations and reality widened. The MAG 7 stocks alone added an astonishing $1.7 trillion to their market cap in Q1.

Bond yields increased, the dollar strengthened, and both Bitcoin and Gold reached new heights. Meanwhile, cocoa prices skyrocketed an incredible 135% year-to-date. Wholesale gasoline and retail fuel prices surged, particularly in March.

It’s been a remarkable quarter for investors, yet history teaches us caution. With such a dynamic market landscape, one must wonder:

Could we see a repeat of this performance?

[Chart courtesy of MarketWatch.com]

1. Moving the markets

The S&P 500 bounced back, halting a three-day losing streak, buoyed by a substantial short squeeze that counteracted a $32 billion equity sell-off by pension funds. The tech-heavy MAG 7 staged a late-day rally, securing a positive close.

In the spotlight, Cintas shares soared 7% following impressive earnings, while Merck’s stock climbed nearly 5%, reaching a new peak. These gains come on the heels of a downturn earlier in the week, despite which, all major indexes are poised to conclude the month and quarter in positive territory when trading wraps up on Thursday.

Should this upward trend persist, it would signify the most robust first-quarter performance for the S&P 500 and Dow since 2019 and 2021, respectively, with anticipated increases of 13.1% and 7.4%. Moreover, all three indexes are on track for their fifth consecutive month of gains and a second successive quarter in the black.

While the market’s ascent continues, the looming threat of an unforeseen event could trigger a market correction. The question arises: Will an external shock disrupt the market’s current calm? Increased volatility in China’s market or interest rate adjustments in Mexico and Switzerland could be the catalysts for change, ushering in a period of uncertainty.

Bitcoin ETFs experienced a surge in inflow, leading to an initial spike, but the momentum faded as the SEC’s ongoing lawsuit against Coinbase dampened investor sentiment, resulting in increased selling and a retreat to the $69k level for Bitcoin.

Oil prices made a comeback, offsetting the previous day’s declines. The dollar remained steady, while gold ascended, testing the $2,200 mark and closing at an all-time high in US dollars.

As we approach the final trading day of March, one wonders: What surprises might the markets hold in store for us tomorrow?

[Chart courtesy of MarketWatch.com]

1. Moving the markets

Today, U.S. stocks experienced a modest uptick as traders aimed to reignite the rally that previously propelled equities to record levels, despite a slight setback in the last session. Newly released economic figures revealed a 1.4% increase in orders for durable goods in February, surpassing economists’ predictions of 0.8%.

One analyst suggested that the combination of robust growth data and inflation rates exceeding forecasts may not be as dire as presumed, attempting to downplay the potential long-term impact of rising inflationary pressures.

Contrastingly, the consumer confidence index for March fell short of expectations, signaling a decline in economic optimism among U.S. consumers.

Despite this, the “hard data” showed signs of resilience, with a rebound in durable goods orders and a continued rise in home prices. This mix of discouraging and encouraging news nudged expectations for a rate cut slightly higher.

Initially, the market responded positively to this paradoxical situation, where good news was perceived negatively and vice versa. However, two late day sell programs ultimately led to a downturn in the major indexes, marking the S&P 500’s third consecutive day of losses.

Concurrently, an early short squeeze quickly dissipated, echoing the pattern observed over the previous two days.

The MAG 7 stocks also experienced a sell-off. Bond yields fluctuated but remained relatively stable, while Bitcoin successfully maintained its $70k level after assimilating the prior day’s gains.

The dollar saw little movement, gold briefly approached the $2,200 mark before retreating to close with minimal gains, and oil prices experienced a slight decline in anticipation of the upcoming inventory data release.

As traders weigh these mixed signals, the question arises: Will the S&P 500 face its fourth consecutive day of decline, or will a resurgence of bullish sentiment steer the index back towards growth?

[Chart courtesy of MarketWatch.com]

1. Moving the markets

Today, Wall Street’s recent surge took a pause, leading to a dip in stock values as the trading week commenced. Despite this, the market is poised for its fifth straight month of gains, with major U.S. stock benchmarks reaching unprecedented closing highs just last week. The S&P 500 saw an increase of approximately 2.3%, the Dow Jones Industrial Average edged closer to the 40,000 level with a nearly 2% rise, and the Nasdaq Composite climbed about 2.9%.

These upward trends were propelled by the Federal Reserve’s reaffirmation of its rate-cutting schedule for the year and the continued excitement over tech stocks, spurred by an AI-driven rally. Although the American Association of Individual Investors Sentiment Survey indicates that overall investor sentiment is still above average, concerns linger about the repercussions of a prolonged rally and persistently high interest rates.

Historical analysis of Federal Reserve rate cycles since the 1970s suggests that the initial rate cut in a cycle poses a greater threat to investors than the subsequent pause. This week, the release of the February personal consumption expenditures price index (PCE) will shed light on inflation trends. However, the market’s response will only be observed the following Monday due to the Good Friday holiday.

On a day marked by disappointing housing and manufacturing data, bond yields and oil prices rose, but Bitcoin dominated the news cycle with a surge above $71,000, partly driven by short sellers covering their positions. The weaker dollar, influenced by a shift in rate-cut expectations, also favored gold prices.

Amidst geopolitical tensions in the Middle East and Russia, bond yields increased, and crude oil prices surged. The MAG 7 stocks recovered from an early plunge, and while Nvidia enjoyed a rally, it failed to surpass its March peak.

With time remaining in this abbreviated trading week, I wonder: What will the next market move be?