Unexpectedly Intriguing!
25 March 2024
An editorial cartoon of a Federal Reserve official lighting a rocket with 'RATE CUTS' written on it and the Wall Street bull in the background.

For S&P 500 (Index: SPX) investors there was one, and only one, market moving headline during the week that was. The Federal Reserve confirmed on Wednesday, 20 March 2024 that interest rate cuts are coming in 2024.

That confirmation was like lighting off a rocket on Wall Street. The index rose nearly 0.9% after the Fed's "dot-plot" projection of future interest rates was released on Wednesday afternoon, closing at an all-time record high. The index would proceed to reach its current new record high of 5,241.53 on the following day, but dipped slightly on Friday, 22 March 2024 to close out the week at 5,234.18. That value represents a 2.3% gain over its previous week's close, making the third week of March 2024 the best of the year to date for the S&P 500.

The CME Group's FedWatch Tool projects the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% until 12 June 2024 (2024-Q2), unchanged from last week. The expectation that the Fed will begin a series of quarter point rate cuts starting on that date and continuing at mostly twelve-week intervals is also unchanged from the previous week.

With the Fed's first rate cut expected in June 2024, investors have locked their forward looking focus on the current quarter of 2024-Q2 in setting current day stock prices. The latest update shows that even though the trajectory of the index is just off its record high, it falls almost right in the middle of the redzone forecast range we added to the chart several weeks ago, which is based on the assumption investors would be focused on 2024-Q2 at this time.

Alternative Futures - S&P 500 - 2024Q1 - Standard Model (m=+1.5 from 9 March 2023) - Snapshot on 22 Mar 2024

Other things happened during the third week of March 2024. Here's a summary of all the other market-moving news headlines that investors absorbed during the week, along with the week's most influential headline.

Monday, 18 March 2024
Tuesday, 19 March 2024
Wednesday, 20 March 2024
Thursday, 21 March 2024
Friday, 22 March 2024

The Atlanta Fed's GDPNow tool's latest estimate of real GDP growth for the first quarter of 2024 (2024-Q1) decreased to +2.1% after last week's +2.3% growth projection.

Image credit: Microsoft Bing Image Creator. Prompt: "An editorial cartoon of a Federal Reserve official lighting a rocket with 'RATE CUTS' written on it and the Wall Street bull in the background."

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