Market Notebook

PRICE ACTION:
Equity prices, as measured by ticker SPY, closed sharply higher on the week, while bond prices, as measured by ticker BND, closed moderately higher.

TECHNICAL ANALYSIS:
SPY appears established in an upward trend while BND price action suggests consolidation.

SENTIMENT:
Sentiment remains bullish U.S. equities as investors search for scraps of data that might suggest inflation is under control, thus allowing the Federal Reserve to relax interest rates. Equity prices suggest market participants are all but convinced that the inflation battle during this economic cycle has been won.

ECONOMY AND FUNDAMENTALS:
Economic indicators within the Market Notebook remain mixed.

Market participants should be on the lookout for recessionary conditions following the first rate cut after a tightening cycle. It seems likely that the first rate cut will be in 2024. To avoid recessionary conditions, the Federal Reserve will have to get the timing of rate cuts exactly correct. Thus far, the Federal Reserve has managed the economic cycle well.

The Conference Board’s Leading Economic Index increased in February. This could be an important inflection point for the current economic cycle. A single data point by itself is not a trend, but it could represent the beginning of movement in the right direction.

Jobless claims are to be watched as an important indicator of a potential recession. Thus far, jobless claims are NOT indicative of a near-term recession.

All the best during the week ahead!

Disclaimer: Nothing in this discussion should be considered investment advice. The content of this discussion is strictly my personal opinion and subject to change at a moment’s notice. Investment advice can only be provided to you by your investment professional and not by a general market discussion such as this one. If you wish to speak with an investment advisor, contact us. We can probably help.