PUT IN WORK (4/8/2024)

Last week, the stock market saw one of its most significant losses of the past few months, thanks to one thing. The Nasdaq (QQQ) ended down 0.8%, while the S&P 500 (SPY) ended down a slightly greater 0.9%. This downward movement came Thursday when stocks initially looked poised to push higher before tanking later in the day. This resulted in the S&P 500 ending down nearly 2% from open to close and the Nasdaq ending down 2.5% from open to close. But what might have caused that sudden turnaround?

Well, you can probably guess.

As we know, most investors are hoping that the Fed will start cutting interest rates in June. Although that’s still the main consensus, just last Wednesday and Thursday, Fed speakers were heard discussing the future of rate cuts, and some investors didn’t like what they had to say. According to the Fed, it’s still possible that we’ll see cuts even later than that. Naturally, the outcome relies on the progress of inflation: if inflation stalls, interest rate cuts might be a bit farther out than some would like. Even so, most Fed officials still have their sights set on rate cuts to take place this year, but they’re not necessarily in a rush, as they say.

This isn’t particularly news, but if the data doesn’t align with their goals, they won’t cut rates—that’s how it’s been all this time. They need to let upcoming data influence their decisions to make the most of their choices. The odds have not changed; the only thing that has changed is the Fed’s rhetoric, which, as we know, can easily throw investors and the whole stock market out of whack. Just because jobs and inflation have come in greater than expected doesn’t mean the plan has changed. We’re personally hopeful for the future, and we were more than happy to see the market share that sentiment as it rebounded on Friday.

(Nasdaq ETF (QQQ) price from April 2023 - 2024 — each candle is 1 week. Chart provided by tradingview.com.)

PORTFOLIO UPDATE

Our stocks ended last week relatively flat, without much downward or upward movement. It was all minor in the grand scheme of things, and we’re still feeling out the market to see if any changes should be made. We plan to hold all currently owned stocks for the foreseeable future. As always, thank you for reading, and happy investing.