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Hope you are all doing well. U.S. stock indexes got off to a shaky start on Monday and Tuesday. It managed to reverse course as the week progressed to remain only slightly below the recently established record highs. The NASDAQ and the Dow finished down around 1% for the week while the S&P 500 posted a fractional decline. Pay attention this week if you have been looking for an entry point to get into the market. We saw a powerful pullback in tech stocks at the end of the day on Friday. If that continues into early next week it may provide a good buying opportunity to go back into stocks for those of you who have been sitting on the sidelines. The Oscars are this evening. I have broken down this week’s update using some of the best picture nominees.

Anatomy of a Fall

Labor market is perhaps starting to cool. February’s jobs growth figure of 275,000 came in above most economists’ expectations for around 200,000 and extended a recent run of solidly positive labor market momentum. However, initial jobs gain estimates for December and January were revised downward, the unemployment rate rose to 3.9%, and wage growth slowed. Unemployment is now approaching its highest rate in two years.

The Zone of Interest

Interest rate forecasts continue to dictate the activity in markets. In testimony before Congress, U.S. Federal Reserve Chair Jerome Powell reiterated the central bank’s intention to cut interest rates at some point this year, provided inflation data continues to show continued easing. “We want to see a little bit more data,” Powell said during one of the week’s two congressional hearings. Powell told us during his testimony to Congress last week that the Fed is “not far” from gaining the confidence it needs to begin a rate-cutting cycle. The weaker labor-market data we saw this week adds slightly to this confidence. Lower wage growth and softer labor-market data may lead to further reductions in inflation. In fact, markets are now pricing in a higher probability of a June rate cut. I still don’t share the market’s view of three to four rate cuts starting around the June timeframe. My belief continues to be that the Fed will be slower to change course with a September start and one or two cuts this year.

American Fiction

The current price of Bitcoin might be fiction and not represent its true value. The cryptocurrency continued its rise hitting an all time of high $70,000 a coin on Friday. However, the star performer for the week was gold. The price of gold futures surged more than 6% for the week to a record high of around $2,200 an ounce on Friday afternoon. The price is up from a recent low of about $1,990 on Valentine’s Day. That is the fastest monthly price rise in five months.

Contact Laurel Wealth Solutions if you’d like to speak about your investments or your plan. You can also reach Stephen Caruso directly by clicking the calendar link below and schedule a phone or zoom appointment at any time. Effective May 1st in person appointments outside of the office or normal business hours will carry an additional fee of $75.