Markets ended an outstanding first quarter on a quiet note ahead of the long holiday weekend.
If stocks spent much of Thursday wavering, it was due in part to a speech given the night before by Fed Governor Christopher Waller. His insistence that "there's still no rush" to cut interest rates cast something of a hawkish pall over the session.
Perhaps it's just as well the stock and bond markets are closed in observance of Good Friday, which means they will be unable to react to tomorrow's release of the Personal Consumption Expenditures Price Index (PCE), which is the Federal Reserve's preferred inflation gauge.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
As of March 28, interest rate traders assigned a 61% probability to the Federal Open Market Committee (FOMC) enacting its first cut to the federal funds rate in June, down from 64% a day ago, according to CME Group's FedWatch Tool.
Exuberance over artificial intelligence (AI) stocks and market expectations for three quarter-point interest rate cuts before year-end have fueled a remarkable rally in stocks off their October lows. Indeed, all three main U.S. benchmarks produced robust gains for the first three months of the year.
The S&P 500 enjoyed its best first quarter in five years with a gain of more than 10% on a price basis. The tech-heavy Nasdaq Composite added more than 9% on a price basis, while the blue-chip Dow Jones Industrial Average rose almost 6%.
If there's a consensus among strategists in their second-quarter outlooks, the market appears to have plenty of room to run.
GDP revised up, jobless claims steady
In economic news, the U.S. economy grew at a faster pace than previously estimated in the fourth quarter. Inflation-adjusted gross domestic product (GDP) increased at an annual rate of 3.4% – up from 3.2% – in the final three months of 2023, the Bureau of Economic Analysis said Thursday.
Separately, initial unemployment claims fell to 210,000 for the week ended March 23, down from 212,000 the prior week. Economists were looking for claims to come in at 215,000.
"Employers have tempered their pace of layoffs, allowing tight labor conditions to persist," says José Torres, senior economist at Interactive Brokers. "Overall, these figures point to little stress in the labor market."
As for Thursday, stocks mostly struggled for direction on relatively light volume. The S&P 500 added 0.1% to finish at 5,254, while the Nasdaq slipped 0.1% to 16,379. The Dow gained 0.1% to close at 39,807.
GE slumps ahead of spinoff
General Electric (GE) was one of the S&P 500's biggest losers on Thursday, shedding 2.6% ahead of its spinoff of GE Vernova.
As we noted recently, venerable GE, once the longest-serving member of the Dow Jones Industrial Average, will officially split into two companies at the start of April.
GE will spin off GE Vernova on April 2, which will then start trading on the New York Stock Exchange (NYSE) under the ticker GEV. Holders of GE common stock will receive one share of GE Vernova common stock for every four shares of GE common stock held as of March 19.
GE stock has nearly doubled over the past 52 weeks as the company has shrunk in order to grow. Analysts remain bullish on GE's prospects, assigning it a consensus recommendation of Buy, according to S&P Global Market Intelligence.
Related content
- The 15 Most Expensive Housing Markets in the US: Cities with the Highest Average Home Prices
- Are Banks Open on Good Friday?
- Kiplinger's Earnings Calendar for This Week
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Planner: If You're Not Doing Roth Conversions, You Need to Read This
Roth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us? A Retirement Psychologist Makes the Case
A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Adviser: This Is How You Can Adapt to Social Security UncertaintyRather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible future Social Security changes.
-
I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS PaperworkMost people can gift large sums without paying tax or filing a return, especially by structuring gifts across two tax years or splitting gifts with a spouse.
-
'Boomer Candy' Investments Might Seem Sweet, But They Can Have a Sour AftertasteProducts such as index annuities, structured notes and buffered ETFs might seem appealing, but sometimes they can rob you of flexibility and trap your capital.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Got $100 to Gamble? These Penny Stocks Could Be Worth the RideVolatile penny stocks are high-risk plays with potentially high rewards. If you have $100 you can afford to lose, these three names are worth a look.
-
Quick Question: Are You Planning for a 20-Year Retirement or a 30-Year Retirement?You probably should be planning for a much longer retirement than you are. To avoid running out of retirement savings, you really need to make a plan.
