Shared by Sam Lawhon, Larson Director of Investments

Market Recap

The S&P 500 fell this week to start Q2 on a sour note as Federal Reserve officials indicated they were in no rush to cut interest rates.

The benchmark equity index ended Friday’s session at 5,204.34, down from last week’s record-high close of 5,254.35. Health care and real estate posted the steepest weekly declines among sectors, while only energy and communication services closed higher.

Fed Chair Jerome Powell said this week that most policymakers believe it will be appropriate to start reducing interest rates at some point in 2024, though more evidence was needed that inflation is easing. Several other Fed officials echoed similar remarks throughout the week.

Last month, the central bank’s Federal Open Market Committee kept its benchmark lending rateunchanged, its fifth straight pause, and maintained expectations for three cuts this year. The FOMC started tightening monetary policy in March 2022 to tame inflation.

About 97% of traders are expecting the committee to leave its target rate unchanged at 5.25%-5.5% at its two-day meeting on April 30 and May 1, according to the CME FedWatch Tool.

Nonfarm payrolls climbed by 303,000 last month, exceeding the Street’s views for a 214,000 gain, the US Labor Department said in a report on Friday. The unemployment rate came in at 3.8%, meeting market expectations.

US manufacturing activity expanded in March, while the services sector continued to grow, though at a slower sequential pace, data from the Institute for Supply Management showed.

Among sectors, health care slid 3.1% amid outsized declines in shares of Humana (HUM), CVS Health (CVS) and UnitedHealth Group (UNH) after the Centers for Medicare and Medicaid Services said the government would increase payments to Medicare Advantage plans by 3.7% on average year over year.

Johnson & Johnson (JNJ) agreed to acquire Shockwave Medical (SWAV) in an all-cash deal with an enterprise value of $13.1 billion.

Real estate slipped 2.9% for the week, while consumer staples lost 2.7% as a 25% plunge in Lamb Weston’s (LW) shares more than countered a 4.9% gain in Conagra Brands (CAG). Lamb Weston logged weaker-than-expected fiscal Q3 results and lowered its full-year outlook. Conagra’s fiscal Q3 results topped the Street’s estimates as volume trends improved.

Consumer discretionary was down 1.9%, led by a 15% slump in Ulta Beauty (ULTA) shares after the beauty retailer’s management offered downbeat views on the beauty category.

Financials dropped 1.4%, while technology shed 1%, weighed down by a 12% decline in Intel (INTC) shares after the chipmaker restated operating losses for its foundry business, as it reorganizes its financial reporting structure to save costs and provide greater transparency.

Utilities fell 0.7% for the week, and industrials lost 0.2%, despite a 12% jump in General Electric (GE) shares after the industrial conglomerate completed the separation of its renewable energy business, GE Vernova (GEV). Materials was down 0.1% for the week.

Energy jumped 3.9%. Schlumberger (SLB) agreed to buy oilfield technology solutions provider ChampionX (CHX) in an all-stock deal.

Communication services rose 2.5%, led in part by a 1.7% gain in Paramount Global (PARA) shares. The company was reportedly in discussions about entering into exclusive talks over being acquired by media company Skydance. Paramount would continue to trade publicly under the Skydance Media offer, CNBC reported.

Separately, Endeavor Group (EDR) agreed to be taken private by private equity firm Silver Lake in a $13 billion buyout deal.

Next week’s economic calendar will feature the key official consumer and producer inflation reports for March, and an initial reading of consumer sentiment for this month. Minutes of the FOMC’s March meeting are scheduled to be released Wednesday.

Provided by MT Newswires

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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