Stock Market Today: Dow, S&P Live Updates for March 12
Our interpretation is that significantly higher rates from here may not be necessary for the inflation rate to continue trending lower. The data have worked to brush aside the scenario that the U.S. economy was facing a so-called “hard landing”, defined by a deepening recession bringing back parallels to the financial crisis back in 2008. If we think back to the pretext when the S&P 500 was trading under the $3,600 level last June, there’s a lot less uncertainty today which is a good backdrop for stocks.
In other words, interest rates at the current level are not the end of the world. It’s been a good start to the year for stock market investors with the S&P 500 (SPX) up more than 7%, and well above the cycle lows. This follows a historically difficult 2022 with the index ending more than -18% lower which featured some extreme volatility. Despite a challenging macro backdrop pressured by stubborn inflation, higher interest rates, and global growth concerns; the setup for stocks today can be best defined by a new sense of resiliency and a more positive outlook.
Analyst Opinions for Dow Jones
While FOMC officials are no longer forecasting a recession, the latest Federal Reserve economic projections in December suggest a sharp drop in U.S. As prices continue to rise, it is hard to find signs of cooling in the hot U.S. labor market. “The Fed minutes are showing that we’re still likely a few meetings away from a rate cut,” Swanke says. Inflation, interest rates and the labor market will likely continue to dominate Wall Street headlines in March.
Investors are increasingly optimistic the Federal Reserve will achieve its goal of a soft landing for the U.S. economy.
We’ve filtered the list for companies with a market capitalization of at least $100 billion — high-volume stocks whose earnings reports are often major trading events for options traders and day traders. The technology sector has reported 20.8% earnings growth in the fourth quarter as the rally in artificial intelligence stocks has continued in early 2024. AI chipmaker Nvidia (NVDA) reported a staggering 265% revenue growth in the fourth quarter, sending its stock price up more than 60% year-to-date. Despite an uncertain economic outlook, the S&P 500 has rallied to new all-time highs in 2024 driven by remarkably strong underlying economic fundamentals. S&P 500 companies have reported their second consecutive quarter of year-over-year earnings growth in the fourth quarter.
Best Brokerage Accounts for Stock Trading
As part of the bullish case, a scenario where economic conditions continue to outperform should be positive with companies benefiting from stronger underlying demand, and we could even see some revisions to estimates higher. Things really start to get interesting when you look at the probabilities for the June meeting, however. At the time of writing, FedWatch gives the Fed a 51% chance of cutting rates by 25 basis points — and a 12% chance of cutting them by 50 basis points. “As long as they keep delivering on earnings results in the same manner as last quarter, most of these stocks should keep outperforming and driving the S&P higher.
- The chart above shows the Chicago Mercantile Exchange’s FedWatch tool, which uses the federal funds futures market to show the odds of different interest rate scenarios.
- Some of the themes at play include efforts by companies to cut costs and focus on efficiencies in support of margins.
- On a price/fair value basis, small-cap stocks remain near some of the greatest discounts to large-cap and mid-cap stocks that we have seen since 2010.
- Treasury bond neared 5% last fall, stocks sold off, dropping well into undervalued territory.
- Neither the author nor editor owned positions in the aforementioned investments at the time of publication.
- For investors that have been sitting on the sidelines, gradual allocations into stocks with regular contributions to savings and retirement accounts is a good starting point.
Another hint about the Fed’s future decisions is the “dot plot” that is released after every other meeting, as part of the Fed’s summary of economic projections. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations https://www.fx770.net/ or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Wayne Duggan has a decade of experience covering breaking market news and providing analysis and commentary related to popular stocks.
And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. 2024 is lining up to be the first year after the pandemic when we are finally past all the disruptions and dislocations. Neither the author nor editor owned positions in the aforementioned investments at the time of publication. Log in or register for a NerdWallet account to see the full earnings calendar.
Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer. For example, as employees shifted to working from home, they required a wide array of technological services and products. We think 2024 will be the first year that both the disruptions from the pandemic and all the subsequent dislocations caused by those disruptions will be behind us. While the rate of economic growth may slow, we expect that, in a more normalized economic environment, the prior fears about small-cap solvency should alleviate.
When will the Fed start cutting rates?
As we wrote in our February outlook, trading on financial news events like Federal Reserve decisions can be hard to do profitably, because the market prices in information very quickly. But the actual market effects of interest rate decisions are more complex, because investors tend to “price in” their expectations of what will happen ahead of time. Value stocks have historically outperformed growth stocks when interest rates are high, but that trend has reversed since the beginning of 2020. The Labor Department reported the U.S. economy added 353,000 jobs in January, far exceeding economist estimates of 185,000 new jobs.
The Zacks #1 Rank List is the best place to start your stock search each morning. Each weekday, you can quickly see the Zacks #1 Rank Top Movers from Value to Growth, Momentum and Income, even VGM Score. Its expanding cloud footprint and strengthening presence in the smart home market remain noteworthy. Rising demand for the SWP, solid total asset balance, SEI Investments’ partnership interest in LSV, strategic buyouts and global presence will continue supporting growth in the quarters ahead. Planned organic and inorganic initiatives, regular dividend hikes and ample liquidity will drive the company’s long-term growth. The shares included in it are weighted according to price; the index level represents the average of the shares included in it.
This narrative was part of the message from Fed Chairman Powell at the February Fed meeting pointing to the disinflation process while recognizing the process is not completely over yet. We cover more than 1,000 of the most widely followed stocks in our Equity Research Reports. Each report features independent research from our analysts and provides in-depth analysis on a company, its fundamentals and its growth prospects. Looking forward, we expect further gains will continue to be driven by a widening out of returns across the market. Gains are increasingly spreading out across other areas in the market that had been left behind.
The massive disruptions caused by the pandemic and dislocations caused by those disruptions are behind us. While we forecast that the rate of economic growth will slow and stocks have already rallied and are nearing their highs, we still see multiple undervalued areas that provide relatively large margins of safety. It may be very difficult for the FOMC to justify a rate cut until the jobs market cools down.
Economists are expecting the FOMC to continue to maintain interest rates at current levels at its next meeting that concludes on March 20. Meanwhile, fourth-quarter earnings numbers have been better than expected as companies are effectively managing rising costs and interest rates that are at 22-year highs. Elevated investments to support growth initiatives, including expansion of the business in international markets and the United States, are likely to limit Copart’s margins. In those positive instances, the S&P 500’s average and median returns were 19.0% and 16.8%, respectively. At the same time, however, the average and median pullbacks those years were 6.4% and 6.9%. Both headline and core Consumer Price Index readings have remained on a downward trend in 2023.
Our message today is that we see more upside, but it’s not going to be a straight line higher, and the market will need some cards to land right to really drive a true breakout. As it relates to corporate earnings pending the final few weeks of the Q4 earnings season, the S&P 500 is on track to reach 2022 EPS of $219.51, up 5% year-over-year as a “bottom-up” aggregate of all underlying companies. The good news is that companies have been beating EPS estimates, on average, with a trend of ongoing profitability, going back to that theme of resiliency. By this measure, it’s fair to maintain an expectation that stocks will continue to climb which is supported by a combination of both economic fundamentals and market technicals. However, this moment — the likely peak of interest rates for the time being — may be a good time to check whether your investment portfolio is diversified across both stocks and bonds. Futures traders will be doing the same — but about interest rate cuts, rather than basketball.
