Welcome to the monthly market update from Midland Wealth Management. I am Chris Zabel, Portfolio Manager. Today I wanted to take a few minutes to give you an update on the markets for the month of March.

Market Returns for March

The stock market continued its upward trend in March as the S&P 500 ended the month at its all-time high and the Nasdaq ended the month near its all-time high. Both indexes had positive returns for five months in a row. The S&P 500 for the month was up 3.22% and is now up 10.55% for the year. Small-cap stocks continued to build off of February’s momentum with the Russell 2000 index up 3.6% for the month. The 10-year Treasury yield saw some volatility throughout the month but ended at 4.2%, near where it started.

GDP

Real GDP growth in Q4 was revised slightly higher to 3.4% annual rate from a prior estimate of 3.2%. GDP estimates for the first quarter range from 1.5 to 3.0%.

Federal Reserve/Inflation

The Federal Reserve met on March 20th and held its key interest rate unchanged and forecasted three quarter-point rate cuts in 2024. Following the meeting, the market is now anticipating the first rate cut to come at the Fed’s July meeting instead of June. The market’s expectations of 3.2 rate cuts this year is now more in line with the Fed’s expectations. February’s core Personal Consumption Expenditure (PCE) rose by 0.3% month-over-month and 2.8 % year-over-year. Expectations are for the core PCE rate to continue to trend lower throughout the year at a slow pace which will allow the Fed to be patient with cutting rates.

Housing

Existing home sales jumped 9.5% in February, which was the largest monthly gain since February 2023. Housing inventory increased 5.9% in February, as well. Demand continues to outpace inventory which lead to median home prices increasing 5.7% year-over-year. Despite strong numbers from existing home sales, new home sales did see a decrease of 0.3% in February. Mortgage rates decreased slightly in March but are still in the high 6% according to the data released by Freddie Mac.

Outlook

The labor market remains robust and continues to support consumer spending. Consumer spending rose 0.8% last month after seeing a slowdown in January. On April 5th, the U.S. non-farm payrolls will be released, and the market is expecting the economy to add around 205,000 jobs and for the unemployment rate to be unchanged at 3.7%. As always, thanks for joining me for this month’s market recap.