Stocks Surge as Tech and AI Lead the Way:
Stocks continued their upward trajectory last week, driven by the strong performance of the technology sector. Positive economic indicators also point to a resilient consumer base that helped further increase investor enthusiasm.
Nasdaq Sets New High
Stocks traded in a narrow band early in the week but ended the five-trading sessions with a powerful advance.
While the Dow dipped lower, artificial intelligence (AI) names powered the gains in the S&P 500 and the Nasdaq Composite. The Nasdaq bobbed around the 16,000 level for most of the week before posting consecutive record highs on Thursday and Friday, surpassing its 2021 record. It was the last of the three major stock benchmarks to reach a record high this year.
Economic news also helped boost markets. The Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, rose 0.3 percent in January versus December—and 2.4 percent on a 12-month basis. Both were in line with expectations. Stocks ticked up on Thursday following the release of the report.
Source: Charles Schwab & Co., Inc
Consumers Remain Upbeat
With all the excitement over AI, it’s easy to overlook some key economic indicators that also speak to the underlying strength of the economy—specifically, consumer data.
In addition to the closely watched PCE report, an end-of-week consumer survey revealed that while sentiment softened in February, it remained near a 32-month high. Fresh data this week also showed an unexpected jump in personal income.
Finally, the PCE report also reflected an ongoing consumer shift from goods to services—a sign the economy continues to normalize after the pandemic. Since two-thirds of gross domestic product comes from consumer spending, these consumer-related metrics helped support the narrative that the economy appears to be gathering momentum.
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, February 29, 2024
2CNBC.com, February 29, 2024
3MarketWatch.com, March 01, 2024
4CNBC.com, February 27, 2024
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