Economic Data and Market Highlights
Global stocks rose 1.97% for the week as represented by the MSCI World. International stocks (MSCI EAFE) rose 1.21%. The S&P 500 scored its best week this year despite wavering performance on Friday. Speculation that the Fed will be cutting in June fueled the strong week, pushing the S&P 500 upwards of 10% YTD. A broader rally in large cap stocks has increased as 23% of S&P 500 stocks are trading at 52-week highs, which is the highest share in roughly three years. The Bloomberg US aggregate Bond Index rose 73 basis points for the week.
AI-themed ETFs in the US have grown to $6.8 billion as of February month end compared to a year earlier where it was valued at $2.55 billion per data from Morningstar. In the leadup to the Fed’s Wednesday announcement US equities saw outflows of $22B in just 3 days – the most since December 2022.
On Friday, the House reached an agreement on Friday to avert a government shutdown until September voting 286 to 134 with the Senate voting in the early hours of Saturday morning 74-26. The agreement in the House led to a move by Rep Greene of Georgia to file a motion to remove Speaker Mike Johnson.
For the first time since 2023, gas prices are now higher year over year, averaging $3.53 per gallon across the US. The US Energy Information Association pointed out that total gasoline stocks dropped last week 3.3 million barrels to 230.8 million barrels. Demand waned a bit, however, from 9.04 million barrels per day to 8.81 million barrels. Refineries typically switch from winter blend to summer blend gasoline in the March and April, leading to a lack of refining capacity. The switch must occur by May 1st so that summer gasoline can get to the pump by June 1st. Butane is added to winter blends to aid in the ignition at lower temperatures.
Source: AAA
Existing home sales surprised on the upside for February (4.38mil vs 3.95 est) as the median price for a single-family home rose in February by 5.64% as well.
In past weeks we have written about the vacancy rates in the US versus abroad. The chart below points to further insights into how the US workforce has changed since COVID and may provide more clarity related to the future of office space in the US.
Japan raised interest rates for the first time in 17 years this week with the countries short term policy rate increasing from -0.10 to +0.10. Japan’s central bank also ended its yield curve control program under which the central bank purchased large quantities of Japanese government bonds to keep long-term interest rates close to 0%, as well as its purchases of ETFs and real estate investment trusts. The change in policy comes from a shift in inflation trends which are above the central banks 2% target rate. In response, the Nikkei 225 climbed 5.64% for the week.
The Past Week’s notable US data points
The upcoming trading week will be abbreviated with markets closed for Good Friday. However, expect a few data releases on Friday morning.
The Upcoming Week’s Data releases to Watch
Authors:
Jon Chesshire, Managing Director, Head of Research
Michael McNamara, Analyst
Sam Morris, Analyst
Data Source: Apollo, Barron’s, Bloomberg, BBC, Charles Schwab, CNBC, the Daily Shot HFR (returns have a two-day lag), Goldman Sachs, Jim Bianco Research, J.P. Morgan, Market Watch, Morningstar, Morgan Stanley. Pitchbook, Standard & Poor’s and the Wall Street Journal.