Opening Comment — Thursday, March 28, 2024
DJIA: 39,760.08, up 477.75
S&P 500: 5,248.49, up 44.91
NASDAQ: 16,399.52, up 83.82
Stocks lower ahead of GDP data
Stock futures are slightly lower on Thursday, as investors await the final reading for the fourth quarter’s Gross Domestic Product (GDP) and February’s Personal Consumption Expenditures (PCE) deflator, scheduled to be released today and tomorrow, respectively. The Dow and the S&P 500 are both decreasing 0.1%. The Nasdaq 100 is also falling 0.1% relative to fair value on the GLOBEX.
U.S. equities were higher on Wednesday, as investors looked forward to key economic releases scheduled for this week, which could affect the Federal Reserve’s (Fed) future path of monetary policy. The Dow was up 1.2%, while the tech-heavy Nasdaq Composite rose 0.5%. The S&P 500 increased 0.9% with all 11 sectors finishing in positive territory. The Utilities sector gained the most, rising 2.8%.
On the data front today, the third reading for the fourth quarter’s GDP and GDP Price Index are expected to increase an annualized 3.2% and 1.6% quarter-over-quarter (QoQ), respectively, both unchanged from the previous reading. The third reading for the fourth quarter’s core PCE Price Index, which excludes the more volatile energy and food components, is projected to rise an annualized 2.1% QoQ, unchanged from the prior reading, while the third reading for the fourth quarter’s personal consumption is anticipated to increase an annualized 3.0%, also unchanged from the prior reading. The final reading of the University of Michigan Consumer Sentiment Index is expected to record 76.5 for March, unchanged from the prior reading. Meanwhile, March’s final readings for the University of Michigan’s one- and 5-10-year inflation expectations are forecasted at 3.1% and 2.9%, respectively, up from the prior readings of 3.0% and unchanged, respectively. Initial jobless claims for the week ending March 23 are expected to be 212,000, higher than the prior week’s 210,000, while continuing claims for the week ending March 16 are projected to register 1.82 million versus the prior week’s reading of 1.81 million. The Market News International (MNI) Chicago Purchasing Managers’ Index (PMI) is expected to register 46.0 for March, higher than the prior month’s 44.0. February’s pending home sales are projected to increase 1.5% month-over-month (MoM), versus the previous month’s decrease of 4.9%.
On the data front tomorrow, personal income is projected to rise 0.4% in February, versus the prior month’s increase of 1.0%, while February’s personal spending is expected to rise 0.5% versus the prior month’s 0.2%. February’s PCE deflator is anticipated to increase 0.4% MoM, versus the previous month’s rise of 0.3%, and increase 2.5% year-over-year (YoY), higher than the prior month’s increase of 2.4%. Meanwhile, February’s PCE core deflator is projected to rise 0.3% MoM, versus the prior month’s change of 0.4%, and rise 2.8% YoY, similar to the prior month’s change. The preliminary reading for February’s wholesale inventories is expected to increase 0.2% MoM versus the prior month’s decrease of 0.3%.
Across the pond, European stocks are mostly higher despite data confirming that the U.K. fell into recession in 2023 with a 0.3% contraction in the final quarter. European stocks are set to finish the best quarterly performance in a year as the rally broadens.
Overnight in Asia, stocks were mixed with Japanese stocks falling as the yen remained near 34-year lows. China’s equity markets rose after reports that the Peoples Bank of China may inject liquidity into the economy.