4/8/24 Weekly Market Commentary

What happened last week…?????????

Regarding potential interest rate cuts, Federal Reserve Chairman Jerome Powell said, “Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy.” The timing of a rate cut has been debated by Fed officials. Atlanta Federal Reserve President Raphael Bostic, a voting member of the Federal Open Market Committee (FOMC), said, “I think it would be appropriate for us to do start moving down at the end of this year, the fourth quarter.” Meanwhile, San Francisco Fed President Mary Daly, also a voting member of the FOMC, said the projected three reductions of 25-basis points is a “very reasonable baseline” but that “a projection is not a promise.”

For Q1 2024, Tesla (TSLA) reported total deliveries of 386,810 (down 8.5% year-over-year) and total production of 433,371 (down 1.7% year-over-year). According to FactSet, analysts expected deliveries of about 457,000. The company said, “Decline in volumes was partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin.”?

According to a report from Reuters, Alphabet (GOOG) has discussed the possibility of making an offer to acquire HubSpot (HUBS), an online marketing software company valued at $35 billion. It would be the biggest deal yet for Alphabet, which ended last year with $110.9 billion in cash. In addition to seeking how much to offer, Alphabet has discussed whether antitrust regulators would allow such a deal to proceed.

The manufacturing PMI for March beat expectations (48.4) as it increased to 50.3 from 47.8, snapping a streak of 16straight contractionary readings (below 50). The non-manufacturing PMI for March missed expectations (52.7) as it decreased to 51.4 from 52.6, but it marked the 15th straight month of an expansionary reading.

The ADP employment change beat expectations (150,000) as it increased to 184,000 from the upwardly revised 155,000 (from 140,000). The unemployment rate bested expectations (3.9%) as it decreased to 3.8% from 3.9%. Nonfarm payrolls beat expectations (200,000) as it increased to 303,000 from the downwardly revised 270,000 (275,000). Average hourly earnings month-over-month matched expectations as it increased to 0.3% from the upwardly revised 0.2% (from 0.1%).

Happening this week…

The following company reports earnings this week: JPM.

On Wednesday, the inflation rate year-over-year for March is expected to increase to 3.4% from 3.2%, which is still well below the peak rate of 9.1% that was reported in June 2022.

Thanks for reading and make sure to wear your special solar eclipse glasses today!

- The Rockline Team

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