Wall Street saw a weekly gain for the for the first time in four weeks. Fed forecasts of two more interest rate cuts this year helped renew investor confidence. Each of the benchmark indexes closed higher last week, led by the Dow, which gained over 1.0%. All 11 of the S&P market sectors advanced, led by financials, health care, industrials, and information technology. Bond values rose higher, dragging yields to their lowest levels in more than two weeks. Despite ticking lower at the end of the week, gold prices rose over 1.2%. Considered a safe-haven asset, gold prices have enjoyed 16 record highs this year, reaching an all-time peak of $3,057.21 per ounce on Thursday. Since January 2024, the price of gold has risen 45.0%, or about $1,000.00 per ounce.
Last Week’s Economic News
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In a move that was expected, the Federal Open Market Committee decided to keep the target range for the federal funds rate at its current 4.25%-4.50%. In support of its decision, the Committee noted that economic activity continued to expand at a solid pace, the unemployment rate stabilized at a low level, and labor market conditions remained solid.
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Sales at the retail level fell short of expectations in February. Retail sales rose slightly last month and rose 3.1% since February 2024.
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The number of issued residential building permits declined in February from the January estimate. The February total was 6.8% below the February 2024 rate.
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Sales of existing homes rose 4.2% in February. Year over year, existing-home sales slid 1.2%. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.65% as of March 13. That’s down from 6.74% one year ago.
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Industrial production (IP) increased in February after moving up also in January. Manufacturing output rose, boosted by a jump of 8.5% for motor vehicles and parts.
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U.S. import prices increased in February following a 0.4% advance in January.
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The national average retail price for regular gasoline was $3.058 per gallon on March 17, $0.011 per gallon below the prior week’s price and $0.395 per gallon less than a year ago.
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For the week ended March 15, there were 223,000 new claims for unemployment insurance.
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Eye on the Week Ahead
The final estimate of gross domestic product for the fourth quarter is available this week. The economy expanded at an annualized rate of 2.3% in the fourth quarter, according to the second estimate. The latest Personal Income and Outlays report for February is also out this week. January data showed that consumer spending, a main driver of the economy, declined 0.2%, while consumer prices rose 0.3%.
Have a nice week!
Sincerely,
Robert G. Carpenter