Markets “In A Nutshell” for April 15, 2024

Markets “In a Nutshell” for April 15, 2024

Investment Week at a Glance

Stocks finished lower for the week. The Dow Jones Industrial Average fell 2.40%, the S&P 500 was down 1.60%, and the NASDAQ fell 0.50%. Foreign stocks (MSCI EAFE) were also down, falling 1.20%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.52%.  (Data source: Wall Street Journal)

CPI Report

The March CPI (consumer price index) report was released last week and was a little hotter than expected. CPI was up 3.5% year-over-year, up from the 3.2% we saw last month, and Core CPI, which excludes food and energy, remained at 3.8% year-over-year. These numbers are not a sign of the Fed cutting rates soon, as we saw an overall increase in CPI data. This was somewhat expected as energy prices have been on the rise, but another area that saw a meaningful increase was medical costs and insurance premiums. The market now has less than a 50% chance of a rate hike in the July meeting after it was at 90% just a month ago. The market reacted as expected to this data as the main focus has been on when the Fed will cut rates. Although these small pullbacks are never fun, they are healthy for the market as it can’t just go in a straight line up forever as it has the past 6 months.

Tension in Middle East Rises

Over the weekend Iran launched an attack on Israel using drones and missiles, almost all were shot out of the sky by Israel and their allies before impact not causing much damage. The market futures dipped on this news over the weekend but as things did not escalate further, the market opened up in the green on Monday morning. Although it seems for now that a larger war has been avoided, it does pose another risk to the market that investors will pay attention to. The market typically does not react to small conflicts; however, a larger full-scale war would be a negative for the market. As we see more and more conflict across the World, the chance of a larger war increases and is something the market will pay attention to.

Quiz:

How often does the stock market have a 10% correction?  (Scroll Down for Answer)

1.     Every 14 months
2.     Every 27 months
3.     Every 39 months
4.     Every 53 months

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer:

1.    Every 14 months.   A 10% decline in the market happens about every 14 months on average since 1980.