Market Perspective for April 14, 2024 – Mutual Fund Investor Guide


The past week was an eventful one as several news reports came out that likely upended the conventional wisdom regarding rate hikes. There also seems to be a disconnect between what the Fed is doing compared to what the European Central Bank (ECB) is planning in terms of future rate cuts.

The week got off to a relatively slow start news wise as markets had their eyes of inflation data released on Wednesday. On Wednesday, it was revealed that inflation had gone up .4 percent on a monthly basis and increased to 3.5 percent on a yearly basis. It was expected that inflation had accelerated by .3 percent on a monthly basis and 3.4 percent on an annual basis.

This led to some members of the Fed speculating that there wouldn’t be any rate cuts at all during 2024. However, many still believe that there is going to be at least one rate cut in the second half of the year. It is unlikely that any movement will take place until at least June as Fed Chair Powell has stated that he is in no hurry to move. Instead, he will wait for the data to confirm that inflation is moving closer to the 2 percent benchmark before easing monetary policy.

On Thursday, price and unemployment reports were released to the public. The Price Producer Index (PPI) revealed that the cost of core goods increased by .2 percent. In addition, prices for all goods were up by .2 percent on a monthly basis. Overall prices were expected to increase by .3 percent on a monthly basis, and both the core and overall PPI were down from last month when they came in at .3 percent and .6 percent, respectively.

Unemployment data revealed that 211,000 people filed for benefits in the past week, which was down from 222,000 last week. Analysts had projected a total of 216,000 claims over the past seven days.

On Friday, the University of Michigan revealed its preliminary consumer sentiment and inflation expectation reports. Consumer sentiment came in at 77.9 percent while respondents believed that the inflation rate would be at 3.1 percent a year from now.

The Nasdaq was down 77.76 points this week to close at 16,175. During the first half of the week, the Nasdaq tumbled before hitting a low of 16,111 on Wednesday morning. It would then rebound to hit a weekly high of 16,450 on Thursday afternoon before easing back to its closing price.

The Dow was down 990 points this week to close at 37,983. It would open at its highest point of the week Monday morning at 38,974 before tumbling the next five trading days. On Friday morning, the Dow would reach its weekly low of 37,894.

Finally, the S&P 500 fell almost 86 points to close the week at 5,123. As with the Dow, the index would start the week at its highest point opening at 5,215 before spending the rest of the week in a freefall. Like the Dow, the S&P made its weekly low on Friday when it dipped to 5,111.

There were a few important announcements outside of the United States as the Bank of Canada (BOC) announced that its key interest rate would remain at 5 percent. The ECB announced that its key interest rate was holding steady at 4.5 percent on Thursday morning. Interestingly, it announced plans for a rate cut in June, which is where it would diverge from the Fed and other central banks. On Tuesday night, New Zealand announced that it was also holding steady on interest rates by keeping its base rate at 5.5 percent.

The upcoming week should be another consequential one for investors. Retail sales data will be released on Monday morning, and it’s expected that core retail sales were up .4 percent while overall retail sales were up .5 percent on a monthly basis. Thursday sees the release of unemployment claims data, and it’s expected that 214,000 people applied for benefits. Finally, Jerome Powell is expected to speak on Tuesday afternoon, and it’s likely that his words will provide some insight into the future of monetary policy.



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