Market Commentary

Markets Quiet in Holiday-Shortened Week

by Sequoia Financial Group

April 1, 2024

With few economic and corporate developments last week, equity markets were quiet heading into the Easter holiday. US equities were higher, with the Russell 2000 (up 1.3%) the relative outperformer this week. The NASDAQ Composite showed some minor weakness as the broader market outperformed the Magnificent Seven and Big Tech. Treasury yields were flat and bond volatility continued to move lower.

Markets edged lower on Monday as the NASDAQ fell 0.4%, snapping a five-day winning streak. Small caps outperformed on the day and edged higher by 0.1%. On Tuesday, US equities sold off in the final half hour after remaining rangebound for most of the day. Big Tech was mostly weak with NVDA declining after six straight days of gains. February durable goods orders rose 1.4% m/m, breaking two consecutive months of declines and above consensus of 1%.¹ March consumer confidence came in at 104.7, matching February’s downward revision to 104.8.² Consumers noted more optimism around the job market but more pessimism around food and gas prices.²

On Wednesday the $43 billion Treasury auction for seven-year notes was well received following strong showings on Monday and Tuesday for two-year and five-year notes, respectively. U.S. equity markets rallied in the final half hour of trading. Markets finished the week higher in Thursday’s session. Several economic data points on Thursday continued to highlight a solid US consumer. Initial jobless claims remain low and came in at 210K, below consensus of 215K.³ March Michigan Consumer Sentiment came in at 79.4, higher than consensus of 76.7.⁴ Consumers noted confidence in softer inflation and personal finances improving.⁴ Final Q4 US GDP came in at 3.4% vs. consensus of 3.3% with the latest revision reflecting upward revision in consumer spending.⁵

While markets were closed for Good Friday, February’s Personal Income and Outlays results showed Personal Income increasing 0.3%, slightly softer than consensus of 0.4%, and Consumer Spending up 0.8%, much higher than estimates of 0.5%.⁶ The headline PCE Index rose 0.3% m/m and 2.8% y/y, and the core PCE Index rose 0.3% m/m and 2.5% y/y; both results were in line with estimates.⁶ Rising energy costs drove headline results higher, increasing 2.3% m/m.⁶

Sources

https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf
https://www.conference-board.org/topics/consumer-confidence/press/CCI-Mar-2024
https://www.dol.gov/ui/data.pdf
http://www.sca.isr.umich.edu/
https://www.bea.gov/news/2024/gross-domestic-product-fourth-quarter-and-year-2023-third-estimate-gdp-industry-and
https://www.bea.gov/news/2024/personal-income-and-outlays-february-2024

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