What happened in the market: 11 March - 15 March 2024

27 Mar

During the week of March 11-15, 2024, the markets experienced a mix of optimism and caution following a turbulent period marked by the anniversary of a bank crisis. Stocks saw a robust rally, with the S&P 500 and other major indices reaching new highs. This surge was fueled by positive sentiment surrounding economic growth, particularly in the tech sector, and expectations for Federal Reserve rate cuts. However, concerns lingered over inflationary pressures and the Fed's monetary policy stance, especially in light of recent stronger-than-expected inflation data.

Overall, the markets remained sensitive to economic indicators and central bank policies, with investors watching for signals from the Federal Reserve's upcoming FOMC meeting. While the week saw stock market highs and notable individual stock movements, concerns about inflation and interest rates continued to influence investor sentiment.

Last Week at a Glance

Last week witnessed challenges for tech companies, underscored by Adobe's notable decline following guidance that fell short of expectations. Adobe's stock plummeted as investors reacted to concerns about the company's future performance, particularly regarding revenue and earnings growth. This downturn in Adobe's shares reverberated across the tech sector, with other industry giants like Salesforce and Amazon also facing declines. These collective losses intensified overall market pressure, signaling broader apprehensions among investors about the outlook for tech stocks.

Additionally, rising Treasury yields heightened investor unease, exacerbating tech companies' challenges. As yields on government bonds increased, they became more attractive relative to riskier assets like stocks, prompting some investors to reallocate their portfolios. This shift in investor sentiment further dampened demand for tech stocks, amplifying the downward pressure on their prices.

Top movers & shakers🎢

Geron Corporation (GERN): 💉 Surged 92% after the FDA panel's favorable vote on its treatment of blood disorder.
Jabil (JBL): 🏭 Plunged 16% due to revenue miss and reduced guidance.
Micron Technology (MU): 💾 Gained 2% with Citigroup's bullish outlook on AI exposure and profit guidance.
Rivian Automotive (RIVN): 🚗 Climbed 3.3% on Piper Sandler's upgrade and capital spending decision.
Ulta Beauty (ULTA): 💄 Dropped 5.2% on weak full-year guidance despite strong Q4 results.
Valero Energy (VLO): 🛢️ Jumped 2.7% to record high post Bank of America upgrade on bullish oil refiner valuations.
Zillow Group (Z): 🏠 Tumbled over 13% amid real estate sector concerns following legal settlement reports.

The Week Ahead: Mar 18 - Mar 22, 2024

The upcoming week of March 18 to March 22, 2024, is anticipated to be pivotal for financial markets as investors closely monitor developments in monetary policy, economic indicators, and corporate earnings.

Attention will be squarely focused on the Federal Reserve's two-day Federal Open Market Committee (FOMC) meeting, scheduled to conclude on Wednesday. Market participants are eager to glean insights into the Fed's stance on interest rates and inflation amid recent stronger-than-expected inflation data. Expectations for any shifts in the Fed's "dot plot" rate projection, which outlines policymakers' forecasts for future interest rate movements, will be of particular interest. Given the recent uptick in inflation, investors will be keenly watching for indications of the Fed's willingness to implement rate cuts in the face of inflationary pressures.

Economic data releases, including housing starts, existing home sales, and jobless claims figures, will offer further clues about the state of the economy. Any surprises in these indicators could potentially impact market movements.

Additionally, the Nvidia GTC (GPU Technology Conference) scheduled from March 18 to 21 will be a key event shaping the AI industry. This conference could impact sentiment and direction within the tech sector, particularly for companies involved in artificial intelligence and graphics processing. Highlighted volatility is expected as investors navigate these critical factors, including monetary policy decisions, corporate earnings, economic data releases, and industry-specific events like Nvidia GTC.

The week ahead is expected to be characterized by heightened volatility as investors navigate various factors, including monetary policy decisions, corporate earnings, and economic data releases, which will shape market sentiment and direction.

Earnings Outlook

Five Below (FIVE): 🛍️ Discount retailer slated to unveil earnings on Wednesday, offering insights into consumer spending habits.
General Mills (GIS): 🥣 Food processor set to release earnings on Wednesday, providing indicators for the food industry.
KB Home (KBH): 🏡 Homebuilder gearing up to report earnings on Wednesday, offering insights into the housing market.
FedEx (FDX): 📦 Shipping giant scheduled to announce earnings on Thursday, offering indicators for the transportation sector.
Nike (NKE): 👟 Athletic apparel powerhouse set to report earnings on Thursday, with high expectations.
Lululemon Athletica (LULU): 🧘‍♀️ Athleisure brand anticipated to unveil earnings on Thursday, offering insights into the activewear market.

Conclusion

In conclusion, during the week of March 11-15, 2024, the markets exhibited optimism and caution amid lingering concerns about inflation and the Federal Reserve's monetary policy. While stocks surged to new highs, driven by positive sentiment surrounding economic growth and tech sector enthusiasm, challenges persisted, particularly evident in the declines faced by some tech companies like Adobe. Rising Treasury yields further added to investor unease. Looking ahead to the week of March 18-22, investors will closely monitor the Federal Reserve's FOMC meeting for insights into interest rates and inflation. Economic data releases and corporate earnings reports from Five Below, General Mills, and FedEx will further indicate the economy's health and sector-specific performance. Heightened volatility is expected as investors navigate these pivotal developments, shaping market sentiment and direction.

Source:

https://www.schwab.com/learn/story/schwab-market-update

https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update

*Disclaimer:

This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.

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