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Market Recap & Upcoming Week

Last week’s labor market update offered mixed interpretations, showcasing the ongoing robustness of employment growth with 303,000 jobs added in March, suggesting a strong but moderating labor market.

Despite expectations of a softening employment environment, the market remains resilient, with unemployment at a historically low 3.8%.

This backdrop maintains consumer spending strength, although job openings have started to decline, hinting at a gradual market cooling.

Meanwhile, wage growth has slowed to 4.1%, signaling easing inflationary pressures but complicating Fed’s rate cut expectations.

Market reactions were notably measured, with stocks dipping in response to signs of a strengthening economy, potentially delaying anticipated Fed rate cuts.

The upcoming CPI report will be critical for adjusting expectations around the Fed’s policy moves, especially if core CPI trends cooler, bolstering the case for a summer rate cut.

Amidst this, the labor market’s enduring vitality, coupled with moderating wage increases, presents a nuanced picture for investors, balancing between continued economic growth and the potential for easing monetary policy.

This week’s financial landscape is brimming with pivotal updates that could sway market sentiments.

The release of the Consumer Price Index (CPI) inflation data for March on Wednesday is particularly significant, with Federal Reserve officials scrutinizing the figures to inform potential adjustments to interest rate policies.

Additionally, remarks from several Fed officials throughout the week, along with insights from the latest Federal Open Market Committee (FOMC) meeting minutes and the Michigan consumer sentiment survey results, are anticipated to offer valuable perspectives on the economic outlook and monetary policy direction.

Simultaneously, the onset of the 2024 first-quarter earnings season promises to shed light on the financial health of the nation’s banking sector, with JPMorgan Chase, Wells Fargo, and Citigroup set to disclose their financial performances.

These reports could provide critical insights into the banking industry’s resilience and profitability, further influencing market trends and investor strategies in the context of ongoing economic uncertainties and the Fed’s monetary policy trajectory.

Daily Trading Signals (Highlights)

Energy Stocks ETF (XLE) – Strong +22.37% run-up on this ETF, which I mentioned in previous videos. Took some profits on it.

 

Definitely possible, with a SL below the breakout point

 

Many people were asking me why I loaded up on commodities a few months ago when stocks and crypto were so bullish. My answer is I prefer to diversify, but I also saw that commodities were cyclical and felt “under-valued”.

Fast forward to today, almost all the top-performing asset classes/indices over the past 20-days are commodities.

 

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Market Recap & Upcoming Week

Last week’s Federal Reserve meeting and subsequent press conference, alongside the release of updated economic projections, reinforced a dovish tilt in monetary policy.

Keeping the fed funds rate steady, the Fed signaled a multiyear rate-cutting cycle starting this year, with expectations to lower the rate to around 3.1% by 2026.

This announcement was met positively by the markets, driving stocks to new highs and softening Treasury yields.

The Fed’s upgraded economic outlook for 2024-2026 and continued assertion that inflation will gradually decrease bolstered confidence in a stable financial environment.

Additionally, global central banks, including the Bank of Japan’s historic rate increase, highlighted a global shift towards adjusting monetary policies.

This broadening market leadership, spurred by the anticipation of rate cuts and improved economic growth, suggests a healthy dynamic for continued investment opportunities.

This week, amidst a shorter trading period due to the Good Friday holiday, the financial markets are poised for a series of important updates.

Key among these are new inflation figures, insights into consumer sentiment, developments in the housing market, and a selection of significant corporate earnings reports.

Despite the holiday closure, the late-week release of the Personal Consumption Expenditures (PCE) index will be closely watched.

This data, crucial for the Federal Reserve’s interest rate decisions, will indicate if inflation is continuing its expected decline.

Additionally, the spotlight will be on earnings announcements from notable companies, including GameStop, Walgreens Boots Alliance, Cintas, Carnival, and Jefferies Financial Group, providing a pulse on various sectors of the economy as investors gauge market health and future trends.

 

Daily Trading Signals (Highlights)

Gold (XAUUSD) – Just 2 days after i posted this, we saw an impressive 3% breakout!

Congrats to those who bought! 💪🏻🔥💰

 

Agriculture ETF (DBA) – Following up on this weekly chart, prices have gone up 10% since the breakout. Can continue to hold and accumulate on pullbacks. 💪🏻🔥💰

 

 

Water Resources ETF (PHO) – Following up on this, prices just broke new highs as predicted, and we are up about 12% from our first buy-in! 💪🏻🔥💰

Looking to add more now since there was a good small price consolidation followed by a controlled breakout, meaning there is still room for more upside.

 

Stock picks from our members:

Dover (DOV) – A very strong stock as seen on the weekly chart, and currently testing new ATHs.

A good idea to wait for a pullback before or after the breakout for a lower risk entry.

 

 

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