Inflation Data Fuels End-of-Quarter Pop in Stocks
Shares started on a higher note on Friday due to encouraging inflation data. Buying power only strengthened as the session progressed, with all three major indices extending their weekly and monthly gains.
tech and communication services stocks That helped propel the markets up once again — and propelled the Nasdaq Composite to its biggest quarterly gain in nearly three years.
bureau of economic analysis (opens in new tab) said this morning that its personal consumption expenditure (PCE) price index, the Fed’s preferred measure inflation which tracks consumer spending rose 0.3% month-over-month in February, and rose 5% year-over-year. This was less than the increase seen in January. core PCE, which does not include perishable food and energy Prices also moved at a slower pace, both on a monthly and an annual basis.
Subscribe to Kiplinger’s Personal Finance
Be a smarter, better informed investor.
save up to 74%
Sign up for Kiplinger’s free e-newsletters
Profit and prosper with the best expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best expert advice – straight to your e-mail.
what does it mean for next fed meeting, It’s almost a tossup, says Bill Adams, chief economist at Comerica Bank. “Forward-looking information such as layoff announcements and recent banking headlines suggest a pause in rate hikes may be appropriate, while backward-looking information such as recent jobs, consumer spending and inflation data favors another hike.” “
Sign up for Kiplinger’s free Investing Weekly e-letter for stock, ETF and mutual fund recommendations and other investing advice.
Also in economic news, the University of Michigan revised its March consumer sentiment index (62.0 versus a preliminary reading of 63.4), down markedly from February’s reading of 67.0. It was also the fourth consecutive monthly decline for the index.
“This month’s turmoil in the banking sector had limited impact on consumer sentiment, which was already exhibiting downward momentum even before the collapse of the recession. Silicon Valley Bank, the report said (Opens in new tab). “Overall, our data revealed several signs that consumers are increasingly expecting recession Ahead.”
Looking at today’s single-stock movers, right-wing media platforms Rumble (RUM (opens in new tab), +7.1%) and digital world takeover (DWAC (opens in new tab), +7.6%) There were two notable gainers following last night’s news that former President Donald Trump was indicted by a grand jury in Manhattan. Rumble also reported fourth-quarter results that included a sharp year-over-year increase in revenue (up from $2.9 million to $19.9 million) and a monthly active user count that more than doubled from the year-ago period. .
near, nasdaq was up 1.7% at 12,221 S&P 500 rose 1.4% to 4,109, and Dow Jones Industrial Average grew 1.3% to 33,274. All the three benchmarks also posted impressive weekly and monthly gains. Per their Q1 performance, the Nasdaq ended the quarter up 16.8% – its biggest quarterly gain since Q2 2020, when it jumped 30.6% – the S&P 500 was up 7.0%, and the Dow added 0.4%.
don’t give up on stocks
It was a stellar first quarter for the equity market. “The stock rally triggered by expectations of a Fed pause proved short-lived,” says Tony DeSpirito, chief investment officer for US Fundamental Active Equities at BlackRock. “The first spoiler – hotter than expected inflation data – was followed by signs that the rate hike was having an economic impact as cracks in the banking system emerged.” Going forward, those two stresses “make the Fed’s job more complicated as it becomes increasingly clear that reining in inflation could not only spur recessions but also undermine financial stability. “
So what does this mean for investors? Don’t give up on stocks, says DeSpirito, because they “continue to play an important role in a long-term investment plan.” is raising best stocks to buy Should include a focus on quality companies, such as best dividend growth stocks He says it is “built to weather diverse markets.” Stablecoins are also solid additions to portfolios, says DeSpirito healthcare stocks Known to be particularly resilient to recession.