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Weekly Market Insights: Geopolitical Tensions and Conflicting Reports Cause Stock Market Decline

Weekly Market Insights: Geopolitical Tensions and Conflicting Reports Cause Stock Market Decline

April 15, 2024

Investors assessed geopolitical tensions and conflicting inflation reports causing last week's stock market decline.

Inflation Spooks Markets

The March Consumer Price Index (CPI) report released on Wednesday caused concern among investors, as it showed that inflation had risen slightly more than expected. As a result, bond yields increased, and stocks declined. Investors were worried about how this news might affect the Fed's rate decision. The 10-year Treasury yield experienced its biggest intraday jump in three years. However, on Thursday, markets rallied after the release of the Producer Price Index (PPI) report, which showed that inflation at the producer level had risen less than expected. The news sparked a tech-focused rally. On Friday, markets opened lower as investors struggled to reconcile the conflicting inflation reports. Additionally, concerns about a potential event in the Middle East led some investors to adopt a risk-off position, contributing to the week's overall market volatility.

Source: YCharts.com, April 13, 2024. Weekly performance is measured from Monday, April 8, to Friday, April 12.
ROC 5 = the rate of change in the index for the previous 5 trading days.
TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.
Treasury note yield is expressed in basis points.

Inflated Expectations

The Federal Reserve published the minutes from their March meeting on Wednesday, expressing their concerns that inflation was not slowing down quickly enough towards their 2% target. Despite this, they reiterated that rate cuts were still a possibility for this year. The start of the Q1 earnings season further reinforced these inflation concerns as several leading money center banks, although beating expectations, predicted lower growth for the rest of the year due to inflation and higher-than-expected rates. On Friday, the University of Michigan's survey revealed that consumer sentiment fell last month, confirming that inflation is still affecting consumers' everyday lives.

This Week: Key Economic Data

Monday: Retail Sales. Business Inventories. Housing Market Index. Empire State Manufacturing Index.

Tuesday: Housing Starts and Permits. Industrial Production.

Wednesday: EIA Petroleum Status Report. Treasury International Capital. Beige Book. 20-Year Treasury Bond Auction.

Thursday: Jobless Claims. Existing Home Sales. EIA Natural Gas Report. Philadelphia Fed Manufacturing Index.


Source: Investors Business Daily - Econoday economic calendar; April 11, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Monday: The Goldman Sachs Group, Inc. (GS), The Charles Schwab Corporation (CHSW)

Tuesday: UnitedHealth Group Incorporated (UNH), Johnson & Johnson (JNJ), Bank of America Corporation (BAC), Morgan Stanley (MS)

Wednesday: Abbott Laboratories (ABT), Prologis, Inc. (PLD), CSX Corporation (CSX)

Thursday: Netflix, Inc. (NFLX), Elevance Health, Inc. (ELV), Marsh & McLennan Companies, Inc. (MMC), The Blackstone Group (BX)

Friday: The Proctor & Gamble Company (PG), American Express Company (AXP)


Source: Zacks, April 11, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

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Food For Thought

"The fool doth think he is wise, but the wise man knows himself to be a fool."

– William Shakespeare

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Tax Tip

More Digital Choices For Filing

The Internal Revenue Service (IRS) has introduced electronic signature options in its forms, making it easier for tax professionals to remotely conduct transactions. To allow your tax professional to use this option, you need to submit Form 2848, Power of Attorney and Declaration of Representative. This form serves as a written authorization that appoints tax professionals to represent taxpayers before the IRS and perform certain acts on their behalf, including providing an e-signature.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov7

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Healthy Living Tip

Hydrate the Healthy Way

Are you looking for ways to break your soda habit but tired of plain water? Fortunately, there are plenty of fun and healthy ways to make your water taste better and motivate you to drink more. Here are some simple ways to jazz up your regular water:

1. Add slices of fresh fruit, such as lemon, lime, or orange. Not only will these fruits enhance the flavor of your water, but they also offer various benefits to your health.

2. Add some sliced cucumber to your water to give it a refreshing twist. Who needs to go to a spa when you can have a glass of cucumber water right at your desk?

3. Try using sugar-free, low-calorie water sweeteners if you have a sweet tooth and miss soda. You can also mix them up with sparkling water or seltzer to satisfy your craving for fizz. Most sparkling waters are calorie-free or low in calories, meaning they can keep you hydrated while also being delicious.

Remember to drink at least half of your body weight in ounces of water every day. What are some of your favorite ways to make water more interesting?

Tip adapted from Baton Rouge Clinic8

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Riddle Of The Week

What has a tail and head but no body?

Last week’s riddle: You have 31 baseballs in a box, and 31 kids are lined up to get them. You give each kid a baseball, but in the end, one baseball remains in the box. How is this possible? Answer: When you give the last baseball away, you give it away within the box—that is, the 31st kid to get a baseball also gets the box.

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Photo Of The Week

Elevador da Bica funicular in Lisbon, Portugal

 

Footnotes and Sources


1. The Wall Street Journal, April 12, 2024

2. CNBC.com, April 10, 2024

3. The Wall Street Journal, April 11, 2024

4. CNBC.com, April 12, 2024

5. MarketWatch.com, April 11, 2024

6. CNBC.com, April 10, 2024

7. IRS.gov, February 13, 2023

8. Baton Rouge Clinic, January 23, 2023

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

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