Weekly Market Commentary

Analysts Anticipate the Fed Funds Rate Will Hold Steady

Posted on March 19, 2024

After a number of weeks of fairly consistent gains, the Major Markets took a pause last week. The Dow Jones Industrial Average and the S&P 500 both closed the week mostly flat, if slightly lower, while the NASDAQ logged the largest decline for the week.

These slight losses in the S&P 500 served as break in the runup that began in earnest at the end of October last year. Since the bottom of the last substantial dip, the market has only seen four weeks of losses out of the last 20.

Despite the loss on the week, the S&P 500 still managed to reach another all-time high on Tuesday.

Last week was marked by higher-than-expected Core CPI, while the headline CPI reading came in as expected. The increased inflation rate less food and energy served to further temper market participants expectations of upcoming rate cuts.

This was echoed Wednesday with the Producer Price Index coming in significantly hotter than expected with a headline reading of 0.6 percent compared to the 0.3 percent expected.

The year-over-year increase of 1.6 percent stood as the largest increase since September of 2023. Roughly two thirds of this increase was attributed to the price of goods with energy seeing a 4.4 percent increase year over year.

The highly anticipated FOMC meeting takes place this week. Analysts anticipate the Fed Funds Rate will hold steady at the 5.25 to 5.5 range given the persistent inflation readings.

Major Markets

YTD as of 03/15/2024  
  Dow Jones Industrial  
  S&P 500  
  MSCI World  
  Russell 2000  
  Bar US Agg Bnd  

S&P Sectors

  YTD as of 03/15/2024
  Comm. Services  
  Cons. Discretionary  
  Cons. Staples  
  Health Care  
  Info. Technology  
  Real Estate  
    Agent/Broker Dealer Use Only  

This week holds the next FOMC Meeting. Analysts already anticipate that the Fed Funds Rate will hold steady at the 5.25 to 5.5 range given the persistent inflation readings. Furthermore, based on the CME Group’s FedWatch Tool, the market doesn’t put a significant probability on a rate cut until the summer months of this year.

Treasuries popped back higher after the curve fell midway between the February month end close and the prior year end close. The greatest increase was in the 5-year duration which added 27 basis points.

Bonds mostly fell as a result. The Bloomberg Barclays Aggregate Bond Index dropped nearly 1.25 percent last week, extending the year-to-date losses to 1.72 percent.

The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries. https://us.spindices.com/indices/equity/sp-500

The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. https://us.spindices.com/indices/equity/dow-jones-industrial-average

The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes. https://indexes.nasdaqomx.com/Index/Overview/COMP

The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets.

The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017, it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country. https://www.msci.com/

The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market. https://us.spindices.com/indices

Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®). https://us.spindices.com/indices

Share this Post...