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.
Index | Started Week | Ended Week | Change | % Change | YTD % |
---|---|---|---|---|---|
DJIA | 38628 | 39131.5 | 503.54 | 1.3 | 3.8 |
Nasdaq | 15775.7 | 15996.8 | 221.17 | 1.4 | 6.6 |
S&P 500 | 5005.57 | 5088.8 | 83.23 | 1.7 | 6.7 |
Russell 2000 | 2032.74 | 2016.69 | -16.05 | -0.8 | -0.5 |
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!
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