Last Week in the Markets: March 25^th – 29^th, 2024

What happened last week?

It was a 4-day week for many exchanges with the observance of Good Friday.  Some international markets operated on the last day of week, but most countries’ trading concluded by end-of-day on Thursday.  North American equity indexes rose again last week, except for the NASDAQ that experienced a minor retreat of less than ½ percent.  The Dow and S&P 500 achieved new record closing highs again.  The first quarter of 2024 concluded with equity indexes delivering 6 to 10 percent returns this year, and 12 to 37 percent since last year.

Gold and oil were both up about 3%, and the Canadian dollar made a modest gain, but it was only the third positive week against the U.S. dollar in 2024.

Important economic news arrived after markets had concluded their week of trading. Friday’s release of the Personal Consumption Expenditures price index (PCE) from the Bureau of Economic Analysis was closely watched as rationale for recent, and clues to future, Federal Reserve actions.  The PCE is the Federal Reserve’s preferred measure of inflation, and consistently lowered and predictable inflation toward target will facilitate the lowering of interest rates. 

Core PCE, which excludes food and energy, sits at 2.8% year-over-year for February.  Annualized inflation is unchanged since last month and is at its lowest level in nearly three years.  The long-term goal of the Federal Reserve is an average of 2% for core PCE, but it has been more than three years since inflation levels were at target levels.  The Fed’s next interest rate announcement will occur on May 1^st, when rates are expected to be held unchanged again.  The earliest date that an interest rate reduction is anticipated is June 12^th according to CME’s FedWatch tool.  BEA's PCE release    CNBC and PCE.

What’s ahead for this week and beyond?

In Canada, imports, exports, and trade balance, and an employment report are scheduled for release on relatively quiet week for economic announcements.

In the U.S., durable goods orders, factory orders, mortgage market index, consumer credit, international trade will be released.  On Friday the non-farm payroll report is scheduled and could provide additional insight into future Federal Reserve monetary policy updates.

Globally, the European Union’s Harmonized Index of Consumer Prices (HICP), Producer Price Index (PPI) and unemployment rate are three of the most important releases planned for the upcoming week.  The European Central Bank’s next interest rate announcement is planned for April 11^th and will rely heavily on inflation and employment data for its upcoming decision.