A Light Week of Data

Week in Review

The Federal Reserve's March FOMC meeting and press conference, along with the release of updated economic projections, took place last week. Despite speculation, the Fed chose to keep the fed funds rate at 5.25% - 5.5%, but their "dot plot" for 2024 still indicated the potential for three rate cuts. Looking ahead, the Fed expects the fed funds rate to gradually increase to approximately 3.1% by 2026, implying the start of a multiyear cycle of rate cuts.

As the meeting approached, there were uncertainties surrounding the Fed's stance on potential rate cuts for the year, especially with slightly higher than expected inflation readings in January and February. However, Fed Chair Jerome Powell clarified in the press conference that the Fed foresees inflation gradually decreasing to 2%, despite a potentially rocky path.

The market responded positively to the Fed's more dovish messaging, as evidenced by the increase in stock prices and bond yields last week. Small-cap and mid-cap stocks, along with sectors such as industrials and financials, were among the top performers, possibly indicating the potential for a broader market leadership shift. With an improved economic outlook and the possibility of lower interest rates, these factors may act as catalysts for market growth in the long term.

Earnings & Economic Calendar

This week, investors will have their eyes on a mix of economic indicators and corporate earnings announcements. The Federal Reserve's preferred inflation gauge, a handful of noteworthy companies reporting their financial results, and the latest economic data will be among the key highlights. Additionally, the U.S. stock and bond markets will be closed on Friday in observance of Good Friday.

On the earnings front, GameStop and McCormick will kick off the week with their reports on Tuesday, followed by Carnival and Cintas on Wednesday. Then, on Thursday, Walgreens Boots Alliance will release their earnings.

In terms of economic data, the Bureau of Economic Analysis will unveil the personal-consumption expenditures price index for February on Friday. Analysts are expecting the core PCE, which excludes volatile food and energy prices, to rise by 2.8% year over year, matching the January reading.

Among other economic data to watch out for this week are the Census Bureau's durable goods report for February and the Conference Board's Consumer Confidence Index for March. These reports will provide valuable insights into the state of the economy and consumer sentiment.

Chart of the Week: Working age woman labor force participation rate

Disclaimer: The author of this blog is a financial advisor but may not be the right advisor for you. In fact, the author may not even be the right advisor for themselves. Please consult a qualified professional before making any financial decisions based on the content of this blog. And remember, just because the author has a fancy title and a briefcase full of spreadsheets, doesn't mean they know what they're doing.