2/20/24 Weekly Market Commentary

What happened last week…?????????

The DJIA, S&P 500, and NASDAQ each saw their winning streaks end at five weeks after last Tuesday's session saw all three indices decline more than 1%. Although the following two trading sessions saw positive returns, the week ended in the red. Stocks reacted to the hotter than expected inflation data released during the week and investors may potentially need to adjust their expectations on when the Federal Reserve may begin to cut interest rates. Meeting minutes from the previous Fed gathering last month are expected to be released on February 21 and could provide further insight.

?

Atlanta Federal Reserve President Raphael Bostic said on Friday, “My outlook is to start the normalization, start returning our policy stance to a more neutral stance in the summer time.” The markets have recalibrated when the first rate cut may occur. According to the CME FedWatch Tool, as of February 16, the probability that rates will remain at 5.25% to 5.50% for both the March meeting and the May meeting have increased with the June meeting having a 59.1% probability for a 25-basis point reduction.

?

The inflation rate year-over-year for January landed higher than expectations (2.9%) but decreased to 3.1% from 3.4%, which had been the highest reading since last September (3.7%) but still far below the peak rate of 9.1% that was reported in June 2022. The core inflation rate year-over-year for January landed higher than expectations (3.7%) as it remained at 3.9%, the lowest reading since May 2021 (3.8%).

?

Nvidia’s (NVDA) impressive surge in stock price, up more than 230% over the past 12 months, has resulted in the company’s market capitalization surpassing two big tech companies. The company overtook Amazon (AMZN, $1.76 trillion) last Tuesday, then on Wednesday it surpassed Alphabet (GOOG, $1.75 trillion). Nvidia is now valued at about $1.79 trillion, trailing only Microsoft (MSFT, $3.00 trillion) and Apple (AAPL, $2.82 trillion).

?

Apple (AAPL) and Microsoft (MSFT) received a favorable ruling from the European Commission which stated that both iMessage and Bing are not considered “gatekeepers” and therefore will not have to make concessions for their products nor be required to open its infrastructure to alternative providers.

?

Happening this week…

The following companies report earnings this week: HD, PANW, WMT, NVDA, INTU.

?

On Thursday, existing home sales for January are expected to increase to 3.97 million from 3.78 million, which was the lowest reading since August 2010 (3.68 million).

Thanks for reading!

- The Rockline Team

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

The S&P 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.