Note: We have moved this blog to a UTSA Investment Society site and will be updating it weekly at this link: https://utsainvestors.wordpress.com/2024/03/11/weekly-market-update
By: Finnley Byres, Alejandra Garcia, Miguel Gutierrez, Cody Houston, Nathan Lara, Diego Pacheco, Carlos Perez, Camille Powell, Sebastian Rodriguez, Professor Ronald Sweet
The purpose of this blog is to provide a quick update on economic and market news so students walking into interviews have a good grasp of key long-term and near-term trends.
Major Economic News Last week it was reported that U.S. GDP rose 3.2% (annualized) in the 4th quarter, slightly below expectations. For 2023 it expanded 2.5%, far exceeding that of the Eurozone and Japan and avoiding the recession much anticipated at the beginning of 2023. The Fed’s preferred inflation metric, the PCE Price Index, rose 1.8% (2.1% excluding food and energy). This is the last inflation reading before Powell’s testimony on Wednesday and Friday’s Jobs Report.
U.S. Stock Markets U.S. large cap growth stocks have had the strongest performance over the past 12 months. Large cap stocks are up 27.5% while small caps are up just 3.3%. Growth stocks are up 41.4% while value stocks are up just 9.8%. Over the past week, all indices were up in a tight range (1.2% for small cap to 2.0% for Nasdaq). While small cap value stocks have yet to stage reliable multiweek outperformance, we believe they are an excellent opportunity as they are at historically very cheap levels.
World Stock Markets Over the past year, U.S. and Japan dominated developed markets (up 27.2% and 43.6%, respectively). Both are at or near all-time highs. Japan closed over 40,000 for its first time, recovering from its massive sell-off since hitting 38,916 in December 1989. It has taken 34 years for Japan to recover from its extended bear market, down as much as 82% during that time.
Even with Japan’s strong performance, developed and emerging markets are trailing the U.S. significantly over the past year, up 11.3% and 3.7%, respectively. Both had positive returns this past week (up 0.7% and 0.1%) but are still trailing the U.S. which was up 1.5%. Japan continued its strong performance, up 2.2%. In emerging markets, China is the big story. It is down 14.3% over the past year but up 11.4% since February 2 and up another 2.5% this past week, recovering from its significant selloff.
Bonds and Rates Interest rates fell slightly last week with the 10-Year Treasury yield down 8 basis points to close at 4.22% today. Bond prices were up slightly in all sectors.
Major Company News The AI-driven rally continued another week. AMD was up 18.4% last week and several others were also up significantly (NVDA, Micron, for example).
Professor Sweet's Musings 