by Justin J. Long CFP® on Feb 24, 2024 10:03:11 AM
Here locally at home the calm after the storm continues to hold in what has seemed like an endless array of events in Las Vegas over the last few months. Now that F1, CES, and the Super Bowl, which have been here since just before Thanksgiving have come to a conclusion, we get a few weeks of calm before spring break, March Madness, and summer come into the fold.
Those that know me well, know I am a huge baseball fan and that is right around the corner as pitchers and catchers reported in the last week or so. We are also excited to host our first annual Big League Weekend at the Las Vegas Ballpark on March 8, featuring what looks like will soon be our hometown team. Keep an eye out for the event invite! What has you excited for spring, hit reply and share with me!
And now onto the weekly recap:
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The S&P 500 and Dow Jones Industrial Average pushed further into record territory this week and the Nasdaq Composite shifted back into rally-mode. Most of the action over this holiday-shortened week occurred on Thursday as participants reacted to another blowout quarter from NVIDIA (NVDA). NVIDIA's report renewed the market's enthusiasm for AI-related stocks, other growth stocks, and semiconductor shares.
NVDA surged 8.5% this week, topping a $2 trillion market-cap for the first time, and leaving its gain this year just below 60%. The PHLX Semiconductor Index (SOX) jumped 1.9% and the Vanguard Mega Cap Growth ETF (MGK) gained 1.6% on the week.
A fear of missing out on further gains was a powerful directional driver this week that added to the post-NVDA earnings rally. Even on Friday, when growth stocks and semiconductor shares underperformed, the broader market finished with a positive bias. The Invesco S&P 500 Equal Weight ETF (RSP) gained 1.2% this week.
Notably, the information technology sector (+2.0%) was the second biggest gainer this week despite the jump in NVDA shares, trailing only the consumer staples sector (+2.1%). All 11 S&P 500 sectors registered gains this week, but the energy (+0.4%) and real estate (+0.9%) sectors still lagged index performance by a decent margin.
The market drew added support from ongoing optimism about rate cuts following comments from Fed officials. Fed Vice Chair Jefferson, who said this morning that it will likely be appropriate to begin cutting rates later this year, adding that he is cautiously optimistic about the way inflation is evolving. Also, Philadelphia Fed President Harker (not an FOMC voter) said he believes the Fed may be in a position to see the fed funds rate decrease this year, but cautions anyone looking for it right now and right away.
Market participants were also digesting the minutes for the January 30-31 FOMC meeting, which were scripted largely as expected. Fed Chair Powell effectively "wrote them" for the market when he conducted his press conference following that January meeting, and several Fed officials in the interim have paraphrased them.
The 10-yr note yield fell four basis points this week to 4.26% and the 2-yr note yield rose seven basis points to 4.72%.
The data provided is for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. The information contained here is not guaranteed as to accuracy or completeness. All economic and performance information is historical and does not guarantee future results.
The Dow Jones Industrial Average is a price-weighted index comprising 30 widely traded blue chip U.S. common stocks. The NASDAQ Composite Index is a market-value-weighted index of all common stocks listed on the NASDAQ stock exchange. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The MSCI Europe, Australasia, and Far East (EAFE) Index tracks the performance of publicly traded large- and mid-cap stocks of companies in those regions. The Cboe Volatility Index (VIX) shows the market’s expectation of 30-day volatility and is constructed using the implied volatilities of a wide range of S&P 500 Index options. Weekly and year-to-date figures for the VIX show percentage changes, not investment returns. The Russell 2000 Index tracks the performance of approximately 2,000 publicly traded small-cap companies in the United States. It is not possible to invest directly in an index.
The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly by the U.S. Federal Reserve. The spread measures the difference in yield between two government securities. A normal (positive) yield curve occurs when longer-term rates are higher than shorter-term rates. The opposite holds true for an inverted yield curve. Year-to-date changes in U.S. Treasury bond yields are shown in basis points (bps). One hundred basis points equals one percent.
Oil prices are represented by West Texas Intermediate (WTI) crude oil.
The G20 countries comprise a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, and over 75% of global trade.
