Fed Testimony and Mixed Jobs Data Shake Up Markets:
Stocks finished lower last week as some investors opted to take profits amid the trading volatility. Despite a midweek rally following positive remarks from Fed Chairman Powell, Friday’s employment news resulted in increased uncertainty among investors to close out the week.
Markets Wobble
The Dow, S&P 500, and Nasdaq all began the week off more than 1% on Tuesday alone. Mega-cap tech stocks were under pressure as investors appeared to take some profits.
Markets clawed back much of their losses on Wednesday and Thursday, with the Fed Chair’s upbeat comments to the Senate Banking Committee boosting stocks. Chair Powell said that once the Fed was confident inflation was tracking “sustainably at 2%,” the Fed would consider cutting short-term interest rates. The S&P 500 and Nasdaq rallied, with the S&P hitting a record close.1,2,3
Source: Charles Schwab & Co., Inc
Friday’s employment news threw some uncertainty into the mix. The economy added 275,000 jobs in February—exceeding the 198,000 expected—but wage growth slowed, and jobless claims edged up. Some investors saw that as a negative, while others viewed it as a “Goldilocks” moment—an economy that’s not too hot or cold. Stocks initially rallied on the news, but profit-takers appeared to arrive as the day progressed.4,5
Source: Charles Schwab & Co., Inc
Productivity, AI, and the Fed
Productivity is one of the critical data points the Fed reviews to determine its next steps with monetary policy. Producing more goods or services with fewer resources helps the economy grow while managing inflation risks.
The 3.2% productivity gains in Q4 reported last week were mainly attributed to the post-pandemic repair of supply chains. However, investors may hope that artificial intelligence will play a more significant role in productivity increases.6,7
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
At Concord Asset Management, we design portfolios for the long run, with the ability to navigate various market cycles. However, you can have confidence that we are monitoring these market-moving events, and we will make reasonable, tactical adjustments as necessary.
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1The Wall Street Journal, March 8, 2024
2MarketWatch, March 6, 2024
3CNBC, March 7, 2024
4CNBC, March 8, 2024
5The Wall Street Journal, March 8, 2024
6The Wall Street Journal, March 7, 2024
7Bureau of Labor Statistics, March 7, 2024
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