Mid-Week Market Minute 3.6.24

Fed Chair’s Prepared Remarks; Jobs Report Coming Friday

Stocks were marginally lower this week as investors digested a plethora of incoming economic data alongside prepared remarks from Fed Chair Jerome Powell. As of Wednesday morning, the S&P 500 was lower by about 0.50% on the week, while the Russell 200 was lower by about 1%. Earnings from Broadcom (AVGO) on Thursday will provide a fresh look at the red-hot semiconductor industry. Separately, bonds rallied against the backdrop of lower interest rates, with the Bloomberg US Aggregate index higher by about 0.70% on the week. 

In prepared remarks for appearances on Capitol Hill this week, Powell hinted that rate cuts still were likely to come sometime this year but cautioned of the risks of reducing policy constraints too early. This echoes the commentary we’ve heard from other Fed officials in recent speeches, warning that lowering rates too quickly risks losing the battle against inflation. 

On the data front, investors will shift their focus to the widely followed jobs report on Friday, where analysts expect jobs growth of 200,000, down from January’s blowout month of more than 350,000. The unemployment rate is expected to remain firm at 3.7%, while average hourly earnings are expected to fall from 0.6% in January to 0.3%. Given the Federal Reserve’s dual mandate of price stability and maximum employment, we can expect these jobs reports will remain in the spotlight for the foreseeable future as markets look for clues into the future path of monetary policy.

Source: GSAM, CNBC, JPMorgan

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