In Markets "In a Nutshell"

Markets “In a Nutshell” for March 25, 2024

Investment Week at a Glance

Stocks finished higher for the week. The Dow Jones Industrial Average rose 2.0%, the S&P 500 was up 2.30%, and the NASDAQ rose 2.90%. Foreign stocks (MSCI EAFE) were also up, rising 1.30%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.20%.  (Data source: Wall Street Journal)

Rates Remain Unchanged, Markets Rise

The Fed had its most recent meeting last week and left rates where they were. However, the Fed “dot plot” still forecasted 3 rate cuts by the end of 2024 and a fed funds rate of 3.1% in 2026. This would mean the Fed expects to cut rates for multiple years going forward as we are currently at a rate of 5.25%-5.50%. There was some uncertainty in the market heading into this meeting as it was uncertain if the Fed still would forecast 3 rate cuts this year. The market took this news well as the Dow Jones, S&P 500, & NASDAQ all hit record highs on Thursday at the close. Markets have continued to make news highs despite the outlook for rate cuts has gone from 6 at the start of the year to now 3. If the Fed does not end up cutting 3 times, it may cause some bumps along the way for the market. The good news is the economy has maintained a strong position and recession fears are mostly gone.

Market Broadening

The past 18-month rally we have seen tech lead the way for the overall market to reach these all-time highs. More recently, however, we have seen a broadening in the market which is a sign of strength. When a few companies such as the “Magnificent 7” make up all the stock market gains, it opens the door to a potential risk of a few companies also dragging the stock market lower on the way down. When we see a broadening out as we are now, it is a sign of strength for the overall market because the overall market is less susceptible to a decline due to a few companies’ weaknesses. For example, Apple is down 7% for the year and Tesla is down 31%, yet the overall market is up 5%-10% depending on the index you look at. Fed rate cuts could also help the market rally broaden out as well as easing inflation.


What is the only sector in the S&P 500 that is currently negative for the year? (Scroll Down for Answer)

  1.     Energy
  2.     Real Estate
  3.     Financials
  4.     Technology



















Answer below.



Have a Great Week!

















2.    Real Estate.  Down 2.3%. The other 10 sectors in the S&P 500 are all positive for the year with Communication Services leading the way, up 15.5%.