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Equities Continue Positive Momentum to End Q1
Equity markets rose in the last trading week of the first quarter. Global equities (represented by the MSCI All Country World Index) were up 0.36%, and domestic stocks (represented by the S&P 500 Index) were up 0.40% on the holiday-shortened week.
Positive Economic Data
Positive economic data from the Commerce Department supported the market’s upward move as durable goods new orders rose 1.4% for the month of February, switching gears from January’s sharp decline of 6.9%. Orders excluding defense and aircraft segments, an indicator of business spending, rose 0.7%, also reversing from the past two month’s declines and beating expectations.
Personal Consumption Expenditures
The Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, was released on Friday for February. Core PCE (excluding volatile food and energy prices) rose at an annual rate of 2.8%, ticking down slightly from January’s 2.9% reading and sitting at a level last seen in 2021. On a month-over-month basis, core PCE rose 0.30%, retreating from January’s uptick of 0.50%.
Global Equities
Global equities (represented by the MSCI All Country World Index) posted all positive months through the first quarter of 2024, up 8.20%. In fact, the index has posted 5 consecutive monthly gains starting in November.
Q1 Earning Predictions
As the first quarter earnings season approaches, expectations have been generally positive. According to FactSet, analysts expect S&P 500 companies to post an average earnings growth of 3.6% which would mark the third consecutive quarter of year-over-year growth.
Looking Forward
This week a monthly labor market update is scheduled to be released on Friday. In February, the unemployment rate ticked up to 3.9%, but the economy added more jobs than expected with 275,000 for the month.
I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.
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