The Week in Review: 02/26/24

“Alexander Hamilton started the U.S. Treasury with nothing, and that was the closest our country has ever been to being even.” – Will Rogers

The S&P 500 and Dow Jones Industrial Average pushed further into record territory last week and the Nasdaq Composite shifted back into rally-mode.

Most of the action over this holiday-shortened week occurred on Thursday as participants reacted to another blowout quarter from NVIDIA. NVIDIA's report renewed the market's enthusiasm for AI-related stocks, other growth stocks, and semiconductor shares.

NVDA surged 8.5% last week, topping a $2 trillion market-cap for the first time, and leaving its gain this year just below 60%.

A fear of missing out (FOMO) on further gains was a powerful directional driver last week that added to the post-NVDA earnings rally. Even on Friday, when growth stocks and semiconductor shares underperformed, the broader market finished with a positive bias.

Notably, the information technology sector (+2.0%) was the second biggest gainer last week despite the jump in NVDA shares, trailing only the consumer staples sector (+2.1%).

All 11 S&P 500 sectors registered gains last week, but the energy (+0.4%) and real estate (+0.9%) sectors still lagged index performance by a decent margin.

The market drew added support from ongoing optimism about rate cuts following comments from Fed officials.

Fed Vice Chair Jefferson, who said that it will likely be appropriate to begin cutting rates later this year, adding that he is cautiously optimistic about the way inflation is evolving.

Also, Philadelphia Fed President Harker (not an FOMC voter) said he believes the Fed may be in a position to see the fed funds rate decrease this year, but cautions anyone looking for it right now and right away.

Market participants were also digesting the minutes for the January 30-31 FOMC meeting, which were scripted largely as expected. Fed Chair Powell effectively "wrote them" for the market when he conducted his press conference following that January meeting, and several Fed officials in the interim have paraphrased them.

Market Snapshot…

• Oil Prices – Delays in interest rate cuts sent oil prices 3% lower. West Texas Intermediate crude futures (WTI) were down $2.12, or 2.27%, to settle at $76.49 a barrel. Brent crude futures settled down $2.05, or 2.5% to close at $81.62 a barrel.
• Gold– Gold prices anticipated a weekly gain buoyed by a softer dollar and a safe haven demand from tensions in the Middle East. Spot Gold was up 0.6% to $2,035.99 per ounce and was on track for a 1.4% weekly rise. U.S. gold futures settled 0.8% higher to $2,046.3. Silver finished the week at $22.982.
• S. Dollar– The dollar index was on track for its first weekly fall in 2024. The index dipped to 103.96, holding below the 3-month high of 104.97 it reached on Feb. 14.
• S. Treasury Rates– Treasury yields were mostly lower last week due to investors considering the path ahead for interest rates after remarks by Federal Reserve speakers. The yield on the 10-year Treasury note was down more than 7 basis points higher to 4.25%. The current Euro/US$ exchange rate is 1.086.
• Asian shares were down in overnight trading.
• European markets are trading mixed.
• Domestic markets are indicated to open in the red this morning.

The 10-yr Treasury note yield fell four basis points this week to 4.26% and the 2-yr note yield rose seven basis points to 4.72%.

This week we'll get another look at fourth quarter GDP, January’s PCE report, and December’s housing price updates.

Have a wonderful week!

The opinions expressed herein are those of Michael Hilger and not necessarily those of Raymond James & Associates, Inc., and are subject to change without notice. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The information contained herein is general in nature and does not constitute legal or tax advice. Inclusion of these indexes is for illustrative purposes only. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. The Dow Jones Industrial Average (INDU) is the most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The Dow Jones Transportation Average (DJTA, also called the "Dow Jones Transports") is a U.S. stock market index from the Dow Jones Indices of the transportation sector, and is the most widely recognized gauge of the American transportation sector. Standard & Poor's 500 (SPX) is a basket of 500 stocks that are considered to be widely held. The S&P 500 index is weighted by market value, and its performance is thought to be representative of the stock market as a whole. The S&P 500 is an unmanaged index of widely held stocks that is generally representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs and other fees, which will affect investment performance. Individual investor’s results will vary. The NASDAQ Composite Index (COMP.Q) is an index that indicates price movements of securities in the over-the-counter market. It includes all domestic common stocks in the NASDAQ System (approximately 5,000 stocks) and is weighted according to the market value of each listed issue. The NASDAQ-100 (^NDX) is a modified capitalization-weighted index. It is based on exchange, and it is not an index of U.S.-based companies. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. U.S. government bonds and Treasury notes are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return, and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury notes are certificates reflecting intermediate-term (2 - 10 years) obligations of the U.S. government. The companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapit obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Dividends are not guaranteed and must be authorized by the company's board of directors. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. The companies engaged in the communications and technology industries are subject to fierce competition and their products and services may be subject to rapid obsolescence. Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated. The information contained within this commercial email has been obtained from sources considered reliable, but we do not guarantee the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Charts are reprinted with permission, further reproduction is strictly prohibited. If you would like to be removed from this e-Mail Alert Notification, PLEASE click the Reply button, type "remove" or "unsubscribe" in the subject line and include your name in the message, then click Send.