Everything to Know about Macro and Markets
Markets closed with mixed results on Friday, losing traction at the end of the day. The S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) fell slightly for the day, pulled down by weakness in Nike and Lululemon. At the same time, the Nasdaq Composite (NDAQ) and Nasdaq 100 (NDX) both clocked in record highs, propped up by a continued rally with semiconductor stocks.
All major indexes, including the small-cap benchmark Russell 2000, were strongly up for the week, with the S&P 500 and the DJIA registering their largest weekly gain so far this year. Investors received a fresh dose of optimism from the Federal Reserve’s stated projection of three interest-rate cuts this year. Markets were also excited by a slate of groundbreaking news arriving from Nvidia’s (NVDA) annual GTC conference, with the AI chip leader clocking in an 11th straight week of gains.
This week will be a holiday-shortened one, with markets closed on March 29th for Good Friday. With no major companies scheduled to report their earnings, there will be plenty of eyes on the economic data releases, as well as on Jerome Powell’s upcoming speech this Friday.
Macro News in Focus
This week, investors will focus on a slew of economic reports scheduled to be released in the next few days. The highlight of the data-heavy week will be Friday’s release of the Core PCE (consumption expenditures ex. volatile items) report, the Fed’s preferred inflation measure, which can sway the central bank’s interest-rate policy.
The latest CPI (consumer prices) and PPI (producer prices) reports reflected stubborn inflationary pressures, with prices running higher than expected. Therefore, economists, policymakers, and market participants will closely focus on the PCE report to understand whether the disinflationary trend has indeed stalled.
Notable Stock News
¤ Reddit (RDDT) successfully debuted on the NYSE on Thursday, with shares surging 48% at the opening. The stock strongly corrected down on Friday, a usual post-IPO occurrence.
¤ Micron Technology (MU) rallied after delivering robust earnings results and providing a stronger-than-expected revenue guidance, buoyed by demand for its AI-supporting hardware.
¤ Super Micro Computer (SMCI) fell after the company said it would issue an additional 2 million shares. SMCI will use the funds for working capital purposes, manufacturing capacity expansion, and increased R&D investments. Despite the decline, analysts are lifting the company’s price targets, as they see it as best positioned to capitalize on Nvidia’s AI systems advancement, as it has a wide range of GPU-optimized liquid-cooled systems ready to deploy.
¤ Nike (NKE) tumbled after reporting flat quarterly sales and providing an outlook for a decline in sales over the first half of the fiscal year.
¤ Lululemon Athletica (LULU) plunged despite beating earnings estimates, as investors were disappointed by weak guidance for the current fiscal quarter and the full fiscal year.
¤ FedEx (FDX) surged, marking its best day in a year, after the logistics and delivery company reported quarterly results that exceeded estimates.
Upcoming Earnings and Dividend Announcements
The Q4 2023 earnings season is over, but several important earnings releases are scheduled for this week.
This week’s most notable earnings reports will be published by TD Synnex (SNX), GameStop (GME), Cintas (CTAS), Paychex (PAYX), and Walgreens Boots Alliance (WBA).
Ex-Dividend dates are coming this week for Realty Income (O), Edison International (EIX), Keurig Dr Pepper (KDP), Amdocs (DOX), Dick’s Sporting Goods (DKS), Deere (DE), and other dividend-paying firms.
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