by Ben Weiss, for the Call to Leap Team
Happy Friday, everyone! And Happy International Goof Off Day! For those who knows me well, I don't need anyone to declare a holiday for me to act goofy, but I certainly won't turn down the opportunity!
But before goofing off for the weekend, let's take a look at what happened this week and what's coming up...
The market this week
After a few choppy weeks recently, we finally saw a solidly positive week in the US market. The megacap Magnificent 7 stocks all notched gains this week, with GOOGL, META, and NVDA leading the charge. GOOGL, in particular, saw a full retracement from its dip earlier in March, topping $150/share to approach its all-time high. Talk of Google's Gemini AI chatbot potentially partnering with Apple iPhone drove the stock up sharply on Monday. Fellow megacap laggard AAPL didn't fare as well this week, suffering further stock declines following news of the US Dept of Justice opening an anti-trust lawsuit alleging Apple created a monopoly with their iPhone and "walled-garden" product ecosystem.
By the numbers, the S&P 500 (+1.54%), Dow Jones (+1.67%), Nasdaq (+1.70%), Russell 2000 (+1.46%) all had an excellent week, with all but the Russell 2000 registering new record highs during the week. The Dow had its best week since December last year.
Did you know?...The S&P 500 has gained over 10% already this calendar year, and about 20% of that growth is attributable solely to NVDA's bull run this year. Wow—talk about having weight in the market!
In the news
How interesting...This week was all about interest rates—both in the US and abroad. Following hotter-than-expected February data for both CPI (Consumer Price Index—what you and I pay for goods and services) and PPI (Producer Price Index—what producers are selling goods and services for), Fed Chairman Jerome Powell and the Federal Open Market Committee met this week as scheduled to discuss the forecast for lowering interest rates. The FOMC's meeting report was largely unchanged from their last meeting earlier this year: the plan is still to hold rates steady for now and anticipate 3 rate cuts later this year.
Coming after some recent mixed-to-hot inflation data, investors were concerned that Chairmen Powell might announce a delay to interest rate cuts if the committee felt like not enough progress had been made yet to combat inflation before lowering rates. The market responded positively to the non-event, seemingly taking a collective sigh of relief, by broadly rallying upward through the rest of the week.
High interest rates offer investors a safe alternative to stocks and ETFs by parking cash in high-yielding treasury bills and money market funds. If those safe alternatives start yielding lower returns (for instance, your HYSA account may start offering 4% instead of 5% APY), investors may see less reason to play it safe and begin to transfer more money back into the stock market for greater return on investment. 📈
Jolly good...Across the pond, inflation in the UK continues to drop along with the US progress. Data showed UK inflation rose 0.6% in February, below the expected 0.7%, and has declined to 3.4% year-over-year, down from 4% in January. Similarly to the US, the United Kingdom saw gas and housing prices contribute the most to inflation last month, while food and restaurant prices posted the biggest drops.
SPY
On the daily charts for both SPY and QQQ here, you'll see two sets of channel lines (orange and green). I continue to observe a secondary, steeper bullish trend which the indices seem to be following. The skinnier, steeper green channels appear to be narrowing or "consolidating" so I'll be watching to see if the indices breakout in either direction from the channel lines or if they continue to ride inside the channel for longer.
Do you agree with how I drew my lines or do you see it differently? Let's chat on Discord!
QQQ
You got this, everyone! Stay disciplined, pay yourself first, and always invest in your greatest asset—yourself. As always, let us know if you have any questions. 🙌🏻
-Ben and Steve
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The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article do not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article. "Call to Leap may earn affiliate commissions from the links mentioned. Call to Leap is part of an affiliate network and receives compensation for sending traffic to partner sites such as ImpactRadius, CardRatings, MyBankTracker, and more."