The final full week of March contained a significant amount of intrigue as President Trump is scheduled to implement new tariffs on April 2. In addition to the anticipation surrounding that event, there were a variety of scheduled news events that helped to fuel market volatility.
On Monday, the Flash Services PMI and Flash Services PMI were released and showed a familiar picture regarding economic activity. The Flash Manufacturing PMI came in at 49.8 percent compared to an expected 51.9 percent. Although this month’s figure came in lower than expected, last month’s figure was revised upward to 52.7 percent. Therefore, it’s possible that the manufacturing sector will still be in an expansion phase when the February number is updated in a few weeks.
The Flash Services PMI came in at 54.3 percent, which was higher than the expected 51 percent. Last month’s figure was also revised upward to 51 percent, which means that demand for services refuses to wain even as consumer confidence weakens.
Two consumer confidence reports were issued this week showing a downward trend in sentiment. On Tuesday, the CB Consumer Confidence report came in at 92.9, which was roughly seven points lower than February. On Friday, the University of Michigan released its own report that came in at 57, which was lower than the projected 57.9.
On Thursday, the final gross domestic product figure for the final quarter of 2024 was released. During those three months, the economy expanded by 2.4 percent, which was slightly higher than the expected expansion of 2.3 percent. Unemployment claims figures were also made public Thursday morning, and over the past seven days, there were 224,000 requests for benefits. This was essentially in line with what analysts expected.
On Friday, the Core PCE Price Index for February was released, and during that period, prices increased by .4 percent. Analysts had expected prices to have increased by .3 percent. This is the preferred inflation gauge used by the Federal Reserve when calibrating monetary policy. Of course, Jerome Powell has already said that he expects a temporary period of inflation, so it’s unlikely to have a short-term impact on interest rates.
The S&P 500 lost 2.53 percent over the last five trading days to finish the week at 5,580. This was a loss of 145 points for a market that has lost 300 points since the beginning of the year. On Tuesday, the index made its high of the week when it touched 5,783 before reversing and trending lower on Wednesday, Thursday and Friday. The low of the week came on Friday afternoon when the index dipped to 5,574.
As with the S&P, the Dow also finished in the red this week losing 800 points to close Friday’s trading at 41,583. Also like the S&P, the Dow is down for the year having lost a little over 960 points since the beginning of the year. The index made its high of the week on Wednesday morning when it reached 42,793. The low of the week occurred on Friday afternoon when the index dipped to 41,538.
Finally, the Nasdaq also lost ground this week, closing Friday 3.91 percent lower to finish at 17,322. For the year, the Nasdaq has lost over 1,900 points, which is just over 10 percent. This week, the market made its high on Tuesday afternoon when it touched 18,271 before reversing and giving up ground on Wednesday, Thursday and Friday. As with the other indexes, the Nasdaq hit its low of the week on Friday afternoon when it dipped to 17,305.
In international news, Great Britain announced Friday that retail sales were up 1 percent over the past month compared to an expected drop of .3 percent. Canada announced Friday morning that its GDP grew by .4 percent on a monthly basis in February. Finally, Australia announced early in the week that its CPI figure grew by 2.4 percent compared to an expected 2.5 percent on an annualized basis.
The upcoming week will likely be a volatile one as nonfarm payroll reports come out on Wednesday and Friday. The fallout from the new tariffs as well as other data such as unemployment claims and the JOLTS jobs report will likely be important to keep an eye on.
