Market Summary – March 18, 2024

Last Week’s Summary

  • S&P 500 Index fell 0.09%
  • International Equities fell 0.87%
  • Emerging Markets fell 0.12%
  • U.S. 10-Year Treasury Yield rose to 4.30%
  • Initial Jobless Claims fell to 209k
  • CPI rose to 3.2%; Core fell to 3.8%
  • PPI rose to 1.6%; Core rose to 2.8%
  • U. of Mich. Sentiment fell to 76.5

What to Watch for This Week

  • M, 3/18/24 NY Fed Services Business Activity
  • T, 3/19/24 Housing Starts
  • W, 3/20/24 MBA Mortgage Applications, FOMC Rate Decision
  • Th, 3/21/24 Initial Jobless Claims, S&P Global US Manufacturing PMI, Leading Index

Weekly Market Recap

The stock market took a hit as the tech sector saw a significant sell-off, compounded by the looming expiration of a substantial volume of options set to mature on Friday, promising potential volatile price swings.

Wall Street is bracing for the quarterly event ominously dubbed “triple witching,” during which derivatives contracts linked to stocks, index options, and futures are due to expire. This compels traders en masse to either roll over their current positions or establish new ones.

An astounding $5.3 trillion in options were poised to expire on Friday. This options event arrives at a pivotal moment for the markets, which are positioning themselves ahead of the Federal Reserve’s upcoming policy meeting next week. Despite a recent uptick in inflation, officials are unlikely to adjust their forecasts of three interest-rate cuts this year and four in 2025.

Traders in interest-rate swaps have shifted their bets on the timing of the Fed’s first full quarter-point rate cut to the central bank’s July meeting. Yields across various maturities rose during the day, with both 2- and 10-Year rates ending the week more than 20 basis points higher.

This week’s market downturn follows reports indicating that inflation remains persistently elevated, intensifying discussions on the extent of easing measures officials might signal after their policy meeting next week.

During their last release of quarterly forecasts in December, Fed officials projected three quarter-point cuts for 2024. They are scheduled to unveil an updated set of these projections, known as the “dot plot,” on March 20.

Download Market Snapshot March 18, 2024

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