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Weekly Market Brief: April 8, 2024

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Stock prices dropped last week, led lower by the Dow Jones Industrial Average, which fell more than 2%. The Dow is the weakest of the large cap indexes this year, up only 3.2% compared to the S&P 500’s 9.1% year-to-date gain. Performance in the bond market has been even weaker:10-Year Treasury Note Futures are off 2.9% in 2024. The bright spot for investors has been commodities. Both crude oil and gold were up more than 4% last week, and both are up double digits for the year. For gold, last week’s close was the highest of all time.

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The US economy proved to be more resilient than most economic forecasters thought possible in 2023, ending the year with GDP running at a healthy 3.4% annualized rate. Things are slowing down at the start of 2024. Retail sales growth decelerated from an annual rate of more than 5% in December to just 1.5% in February. Industrial production is in negative territory. The bright spot is the labor market. The unemployment rate dropped back to 3.8% in March, after the economy added 303,000 jobs. That’s the highest monthly add since January 2023.

A recession sometime in 2024 is possible as the effects of Federal Reserve policy actions come into full force, but looser policy is likely to come later this year, too, with inflation well off of last year’s peak. The year-over-year change in core PCE is down to 2.8%. Despite all the heat they’ve taken along the way, Jerome Powell & Co. are closer than ever to threading the needle on this soft landing.

What’s Ahead

Here are the key data releases to keep an eye in the upcoming week: