Stock futures rose slightly in overnight trading on Sunday following a down week in the market, as the 2024 rally took a breather. Futures on the Dow Jones Industrial Average climbed 65 points, while S&P 500 futures and Nasdaq 100 futures both inched up by 0.1%. The previous week saw the 30-stock Dow falling by 2.3%, the S&P 500 declining nearly 1%, and the Nasdaq Composite dipping 0.8%. However, the market ended on a positive note due to a stronger-than-expected jobs report on Friday, giving hope to investors that a strong economy could continue to support corporate earnings growth.
Bill Adams, chief economist at Comerica Bank, noted that jobs and wages are rising solidly, with aggregate payrolls outpacing inflation. This is expected to keep Americans spending in 2024 and support the economy’s forward progress. Investors are eagerly awaiting readings for the March consumer and producer price indexes later in the week for further clarity on the Federal Reserve’s fight against inflation. Economists expect the CPI number, to be released Wednesday morning, to increase by 0.3% last month and 3.5% year over year. The hope is for the disinflationary process to get back on track.
The Federal Reserve’s response to inflation and signals for the future are key concerns for investors. While the central bank appears unconcerned by robust employment gains, inflation is a significant issue. Investors are closely monitoring the CPI, PPI, and PCE data to see if the disinflationary process is indeed back on track. Additionally, investors are grappling with rising bond yields and oil prices. The benchmark 10-year Treasury yield surged by nearly 20 basis points last week to about 4.4%, and U.S. crude oil prices touched $87 amid geopolitical tensions.
Despite the challenges and uncertainties in the market, the hope remains that a strong economy and solid job market will continue to drive growth. The positive jobs report at the end of the previous week provided a boost to investor confidence, indicating that corporate earnings growth could be sustained in the face of higher interest rates. The focus now is on the Federal Reserve’s actions and the upcoming data releases to gauge the progress in fighting inflation and supporting economic growth. Investors are also keeping an eye on bond yields and oil prices, which have seen significant increases recently.
Overall, the market experienced a mixed week, with some indices posting losses while others ended on a positive note. The focus is now on economic indicators, particularly the consumer and producer price indexes, to provide insight into the state of inflation and the overall health of the economy. Investors are cautiously optimistic about the future, with hopes that the strong job market and rising wages will continue to support growth despite the challenges posed by inflation and rising interest rates. Monitoring the Federal Reserve’s actions and economic data releases will be crucial in navigating the market in the coming weeks.
