Stock Market Outlook: March 2024

what is the outlook for the stock market today?

ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. The fact that sector rotation ETFs underperform the S&P 500 is not the only mark against sector rotation strategies. In a widely cited 2007 paper, economists at Massey University in New Zealand examined U.S. stock returns between 1948 and 2006.

However, the market is pricing in a 66.1% chance the FOMC will cut interest rates by at least 25 basis points by June. Although the Fed wants to see inflation cool further, it said it doesn’t need to fall to its 2% target for rate cuts to be possible. Stocks always have risks, but it’s important for investors to not lose track of the big picture and long-term outlook.

AI chipmaker Nvidia (NVDA) reported a staggering 265% revenue growth in the fourth quarter, sending its stock price up more than 60% year-to-date. Despite an uncertain economic outlook, the S&P 500 has rallied to new all-time highs in 2024 driven by remarkably strong underlying economic fundamentals. S&P 500 companies have reported their second consecutive quarter of year-over-year earnings growth in the fourth quarter. In terms of valuation, it can be said that the S&P 500 is trading at an 18.5x 2023 consensus earnings or 16.5x looking out towards 2024.

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Another dot plot is due after the March meeting, and if the median FOMC estimate for end-of-2024 interest rates is even lower, that could imply that the timetable for rate cuts has accelerated. The report comes ahead of the closely watched nonfarm payroll report on Friday. A lower reading than January’s blowout number could help fuel bets for near-term rate cuts from the central bank. As part of the bullish case, a scenario where economic conditions continue to outperform should be positive with companies benefiting from stronger underlying demand, and we could even see some revisions to estimates higher.

  1. Investors are pricing in a 33% chance the Fed will cut rates just 75 basis points by December, according to the CME FedWatch tool, in line with what central bankers have forecast.
  2. Log in or register for a NerdWallet account to see the full earnings calendar.
  3. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues.
  4. The Zacks #1 Rank List is the best place to start your stock search each morning.
  5. The fact that sector rotation ETFs underperform the S&P 500 is not the only mark against sector rotation strategies.

Investors are increasingly optimistic the Federal Reserve will achieve its goal of a soft landing for the U.S. economy. “Ongoing progress toward our 2% inflation objective is not assured,” the statement added. “Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy.” The inclusion of a company in the Dow Jones Industrial Average does not depend on defined criteria. Instead, an independent Wall Street Journal commission decides whether a share is to be included or excluded. There are no fixed times for reviewing the composition of the index, since changes are only made by the commission as and when they are needed.

It’s possible that some investor or economist could discover an easy and reliable sector rotation method in the future, but they haven’t figured one out yet. But the actual market effects of interest rate decisions are more complex, because investors tend to “price in” their expectations of what will happen ahead of time. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Our estimates are based on past market performance, and past performance is not a guarantee of future performance. Value stocks have historically outperformed growth stocks when interest rates are high, but that trend has reversed since the beginning of 2020. “As long as they keep delivering on earnings results in the same manner as last quarter, most of these stocks should keep outperforming and driving the S&P higher. Even if we get more incremental rate volatility, investor confidence in their underlying fundamentals should support big tech names better than most large/super cap alternatives,” Rabe says. The report showed employers added 140,000 jobs last month, fewer than 150,000 estimated by Dow Jones. In terms of inflation, this was the biggest headache for the market in 2022 when the annual CPI reached a 30-year high of 9.1% in Q2.

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If we think back to the pretext when the S&P 500 was trading under the $3,600 level last June, there’s a lot less uncertainty today which is a good backdrop for stocks. To summarize, federal funds futures markets are almost certain an interest rate cut is coming soon. They just don’t know exactly when — but at the moment, the odds point toward June 12. In the Fed’s January meeting minutes, officials noted they will not be comfortable cutting interest rates until they have “greater confidence” inflation is still declining. In addition, FOMC members highlighted the “risks of moving too quickly” on rate cuts. A strategy that includes a well-diversified portfolio across equities and fixed income with a long-term time horizon can drive capital appreciation over time.

It’s possible that years from now we can look back at the events of this time and it will just be remembered as just noise while the stock market is significantly higher. From the price chart, the first step here for the S&P 500 is to climb above the $4,200 level which has worked as an area of technical resistance since last year. As it relates to corporate earnings pending the final few weeks of the Q4 earnings season, the S&P 500 is on track to reach 2022 EPS of $219.51, up 5% year-over-year as a “bottom-up” aggregate of all underlying companies. The good news is that companies have been beating EPS estimates, on average, with a trend of ongoing profitability, going back to that theme of resiliency.

The Zacks #1 Rank List is the best place to start your stock search each morning. Each weekday, you can quickly see the Zacks #1 Rank Top Movers from Value to Growth, Momentum and Income, even VGM Score. Apple is benefiting from momentum in the Services business, strong adoption of Apple Pay and growing Wearables business.

Shelter prices continue to account for a large portion of CPI inflation. In February, the Fed factored mixed data into its efforts to secure a soft landing for the U.S. economy. Rob Swanke, senior equity strategist for Commonwealth Financial Network, says he expects the first Fed rate cut will not come until June. The S&P 500 gained 5.34% in February, bringing its year-to-date total return up to 7.11%.

what is the outlook for the stock market today?

That was down from peak inflation levels of 9.1% in June 2022 but above economists’ estimates of a 2.9% gain. The headline CPI reading was also up 0.3% on a monthly basis, the highest monthly gain since September. Dan Victor, CFA is President of Posto Asset Management LLC, a registered investment advisor based in Miami Beach, Florida. Recognized as the 2023 Seeking Alpha Market Prediction Contest winner, Dan forecasted the 24% rally in the S&P 500 to within 8 points. Dan brings 15 years of investment management experience across major financial institutions in research, strategy, and trading roles.

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NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues.

Whirlpool’s Q4 sales was hurt by the sluggish demand environment and adverse price/mix, mainly in Europe and North America. Perrigo’s businesses continue to be impacted by pricing and other macro-economic pressures. Intense competition from major players within the industry is a perennial challenge for the company.

For this year, the consensus is for 2% EPS growth towards $224.07, a modest number but at least still positive. Some of the themes at play include efforts by companies to cut costs and focus on efficiencies in support of margins. Into 2024, the expectation is for a stronger recovery with EPS climbing by 11% to $249.56. My Portfolio – Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank. Zacks Portfolio Tracker on provides 24/7 monitoring of your stocks and will give you the information you need to help you determine when to buy, hold or sell your stocks.

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