The S&P 500 marked its best weekly performance of 2024, snapping a two-week losing streak in the process. The upward bias was rekindled after the Federal Reserve's updated dot plot stuck to three interest rate cuts this year. Many market participants were fearing much worse, and Fed Chair Jerome Powell further calmed concerns with a relaxed attitude towards recent hot inflation reports. For the week, the S&P 500 advanced +2.3%, the Dow Jones Industrial Average added +2.0%, and the tech-heavy Nasdaq Composite climbed +2.9%. 

The S&P US Manufacturing PMI rose to a 21-month high of 52.5 in March 2024 from 52.2 in February, beating market forecasts of 51.7. The reading pointed to a solid improvement in the health of the manufacturing sector, helped by expansions in output and employment. Also, suppliers’ delivery times continued to recover from the disruption to supply chains seen at the start of the year, shortening for the second month. Despite the marked pick-up in manufacturing production, firms scaled back their purchasing activity in March following a marginal rise in February. 

The S&P US Services PMI fell to a three-month low of 51.7 in March 2024 from 52.3 in February, slightly below forecasts of 52, reflecting a loss of momentum in the service sector. New business growth softened and new business from abroad declined while employment increased. Meanwhile, inflationary pressures increased amid increasing wages, and improved business confidence contributed to an increase in planned marketing activity.  Continued jobless claims decreased more than expected in mid-March, remaining at historically low levels. 

Retailers closed over 11,000 stores between 2019 and 2021.  Lately, the trend has shifted. In 2022, 1,500 net stores opened, in 2023 almost 500 opened, and year to date, 750 have opened. Combined with almost no new retail construction allowing oversupply to dissipate, and thriving suburban demand, the vacancy rate is below 4.8%, a record low. 

In the week ahead, the spotlight will be on a multitude of Federal Reserve speakers who will be returning from a blackout period following the latest FOMC meeting. With the Fed signaling confidence in three anticipated interest rate cuts this year, investors will be monitoring the upcoming speeches for commentary that reenforces that messaging.  With the Fed's latest release, market participants have increased their expectations of a 25-basis point rate cut at the central bank's June meeting.  The economic calendar will feature the Fed's preferred inflation gauge - the personal consumption expenditures price index. There will also be data on consumer confidence and durable goods orders.