Market Preview
In the lead-up to the FOMC meeting, the market landscape seemed almost suspended in time today, with movements registering slight dips across the board. The S&P 500 Index ($SPX) (SPY) posted a -0.09% decrease, while the Dow Jones Industrials Index ($DOWI) (DIA) and the Nasdaq 100 Index ($IUXX) (QQQ) followed suit with -0.07% and -0.08% declines respectively.
Reading the FOMC Tea Leaves
Investors are on tenterhooks waiting for the culmination of the 2-day FOMC meeting and the subsequent statements from Fed Chair Powell. All eyes are on any adjustments to the federal funds target range, as well as insights gleaned from the newly updated Fed projections. Fed Chair Powell’s after-meeting press conference is anticipated to provide much-needed guidance on the direction of the Fed’s monetary policy.
Stock Winners and Losers
Signet Jewelers Ltd is dancing to a negative tune today, with shares plummeting by over -10% after reporting Q4 sales that fell short of consensus and a tepid outlook for 2025 total sales. In contrast, the aroma of success lingers around Chipotle Mexican Grill, enjoying a hearty +6% boost following the board’s approval of a 50-for-1 stock split. General Mills is also basking in positivity, with shares up more than +2% after an impressive Q3 net sales report.
Shifting focus to the mortgage market, US weekly MBA mortgage applications witnessed a downtrend of -1.6% in the week ending March 15. The average 30-year fixed rate mortgage saw a notable rise, reaching 6.97% from the previous week’s 6.84%.
Considering the prospects of a rate cut, the markets are cautiously optimistic, with expectations for a -25 bp rate cut standing at 1% for today’s meeting, 11% for the April 30-May 1 session, and a solid 68% for the June 11-12 gathering.
Global Market Recap
Overseas markets are painting a mixed picture, with the Euro Stoxx 50 edging down by -0.14%. China’s Shanghai Composite, however, closed in the green with a +0.55% gain, while Japan’s Nikkei Stock Index took the day off in observance of the Vernal Equinox Day holiday.
Interest Rate Ruminations
June 10-year T-notes are inching upwards this morning, influenced by stronger pricing in European government bonds. Meanwhile, European bond yields are on a downward trajectory, with the 10-year German bund yield and the 10-year UK gilt yield dipping significantly.
In Germany, February’s Producer Price Index (PPI) exhibited weakness, falling below expectations. ECB President Lagarde’s comments echoed caution, emphasizing the ECB’s inability to commit to a specific rate path post the anticipated June rate cut.
In the Limelight: US Stock Movements
Moderna (MRNA) grapples with insider selling signs, leading to a -4% dip in both the S&P 500 and Nasdaq 100. Equinix (EQIX) felt the heat after Hindenburg Research revealed its shorting stance, dragging down other real estate trust stocks like VICI Properties, Digital Realty Trust, and Crown Castle.
On the flip side, Caterpillar (CAT) is sailing in the red after Senate Democrats raised concerns about high-level DOJ interventions to shield the company from a massive tax penalty. Chipotle Mexican Grill’s stock split decision saw its shares soaring by +6%, while General Mills’ sturdy Q3 net sales report lifted its stock by more than +2%.
Upcoming Earnings Reports (3/20/2024)
Keep an eye out for earnings releases from Five Below Inc (FIVE), General Mills Inc (GIS), Micron Technology Inc (MU), NET Lease Office Properties (NLOP), and Ollie’s Bargain Outlet Holding (OLLI).
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The keen observations of Rich Asplund underline critical market information for discerning investors, without any vested interests. The details shared here are crafted purely for enlightening investors. For more insights, refer to the Barchart Disclosure Policy.
Remember, the musings expressed in this article are the author’s own and not Nasdaq, Inc.’s viewpoint – just a helpful hint to keep in mind.
