Stocks Close Week and Quarter on Mixed Note

The Dow (+0.8%), NASDAQ (-0.3%), and S&P 500 (+0.4%) exhibited mixed results last week.  Meanwhile, taxable bonds gained about 0.2% and tax-free municipal bonds fell about 0.2%.  The 10-year Treasury yield held steady, falling 0.01% to close at 4.20%.

Very little economic data was reported last week, except for the Fed-favored inflation gauge, Personal Consumption Expenditures (PCE), which came out on Friday.  The markets were closed for the holiday, so there was no reaction to the data.  However, the data was tame, as it exhibited inflation rates that were in line with expectations.  Beneath the surface of the report was concerning data.  Consumer spending increased by 0.8%, yet personal income gained only 0.3%, below expectations.  In short, the consumer continues to spend at a rate faster than their income growth, which likely serves as a main cause for the increasing and record levels of credit card debt.

Last week also closed out the month and the first quarter of 2024, and both were quite strong.  For the month of March, all three stock indices were up about 3%, and bonds were up about 0.8%.  March marked the 5th consecutive month of gains for the broad stock markets.  For the 1st quarter, the Dow, S&P 500, and NASDAQ gained about 4%, 9% and 11%, respectively, while bonds fell about 0.8%.  Here’s a stat from Barron’s – of the 16 times the S&P 500 gained at least 8% in the first quarter since 1950, only once (1987) did the index lose ground for the remainder of the year.  That’s encouraging!

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