John Hancock: Weekly Market Recap Week Ended March 21

Fed’s updated outlook

The U.S. Federal Reserve continued to take a wait-and-see approach to the economic outlook as it again kept its benchmark interest rate unchanged. Policymakers maintained their consensus outlook for two rate cuts by year end, although the central bank negatively adjusted other expectations by reducing its economic growth rate forecast and pushing its inflation projection higher.

Retail setback

U.S. retail sales fell well short of most economists’ expectations, posting a weak result for the second month in a row. The government reported on Monday that sales in February rose 0.2%, below consensus expectations for a 0.6% gain. In addition, January’s initially reported sales figure showing a 0.9% decline was revised downward to a 1.2% drop.

Buybacks expand

U.S. companies spent nearly 19% more to buy back shares in 2024 than they did in 2023. Share repurchases by companies in the S&P 500 totaled a record $943 billion last year, up from 2023’s $795 billion, according to S&P Dow Jones Indices. On a quarter-to-quarter basis, buybacks rose 7% in last year’s fourth quarter relative to the third quarter.

Price check ahead

A report scheduled to be released on Friday could ease the recent uncertainty over inflation’s trajectory. The Personal Consumption Expenditures Price Index is the U.S. Federal Reserve’s preferred gauge for tracking inflation. The most recent PCE inflation report showed inflation rising at an annual rate of 2.5% in January, slightly below the 2.6% figure recorded the previous month.

Source: https://www.jhinvestments.com/weekly-market-recap#market-moving-news