New York Stock Market Mixed Near Flat... US Q4 GDP Growth Rate 3.4%

US Q4 GDP Growth Rate Revised Up to 3.4%...New Unemployment Claims at 210,000 Below Expectations
Focus on Feb PCE Inflation Data to Be Released on 29th

The three major indices of the U.S. New York stock market showed mixed movements around the flat line in early trading on the 28th (local time). After attempting a rebound for the first time in three days the previous day, a cautious stance is deepening. The U.S. economy was also found to have maintained solid growth in the fourth quarter of last year.

As of 10:10 a.m. at the New York Stock Exchange (NYSE) on this day, the Dow Jones Industrial Average was down 0.01% from the previous close at 39,756.15. The S&P 500, which focuses on large-cap stocks, was up 0.05% at 5,250.97, while the tech-heavy Nasdaq index was down 0.05% at 16,392.08.

By individual stocks, Home Depot is down 0.55% after announcing the acquisition of building materials distributor SRS Distribution for $18.25 billion. Walgreens Boots Alliance reported better-than-expected second-quarter earnings but lowered its outlook for fiscal year 2024, causing a 0.93% decline. Trump Media & Technology Group (TMGT), the parent company of Truth Social, a social networking service founded by former U.S. President Donald Trump, was down 0.94% on its third day since debuting on the New York stock market.

The three major indices of the New York stock market are expected to close higher in the first quarter of this year. The S&P 500, which broke its all-time high the previous day, has risen about 10% so far this year. This is the largest increase in four years since 2019 (13.1%). The Dow Jones Industrial Average rose 5.5% during the same period, marking the largest gain since 2021 (7.4%). The Nasdaq index also increased by 9.3%. On a monthly basis, the S&P 500 rose 3%, while the Dow Jones Industrial Average and Nasdaq indices each rose more than 1.9%.

B. Riley Wealth’s Chief Market Strategist Art Hogan said, "The biggest data comes out on Friday when the market is closed," adding, "Investors are feeling more energized and a greater willingness to take risks is driving the market."

The U.S. GDP growth rate indicator released that morning reaffirmed the robust growth of the U.S. economy. The U.S. Department of Commerce announced that the GDP growth rate for the fourth quarter of last year (final figure) was 3.4% annualized. This was revised upward by 0.2 percentage points from the preliminary figure (3.2%) announced last month. The U.S. economic growth rate is released in three stages: advance, preliminary, and final, and unlike Korea, it is published as an annualized growth rate compared to the previous quarter (seasonally adjusted). Strong consumer spending and increased corporate investment in nonresidential structures such as factories were reflected.

Jeremy Straub, CEO of Coastal Wealth, said, "The GDP figures confirmed the economy’s strength," adding, "Fed rate cuts would be welcome news for stocks but are not a necessary condition for a bull market. The market has rallied over the past 18 months despite high interest rates."

The labor market also remains strong. The U.S. Department of Labor reported that new unemployment claims for the week of March 17?23 totaled 210,000, slightly below the market expectation of 212,000. This was the same as the revised figure of 212,000 from the previous week. New unemployment claims, which reflect corporate layoffs, have hovered around 200,000 since mid-September last year. Compared to before the COVID-19 pandemic, this remains a record low level. Continuing claims, which count those applying for unemployment benefits for at least two weeks, were 1,819,000 for the week of March 10?16, an increase of 24,000 from the revised previous week. This indicates fewer existing unemployed people have found new jobs.

The market is closely watching the February Personal Consumption Expenditures (PCE) price index to be released on the 29th. The core PCE price index for February is expected to have risen 0.3% month-over-month, a smaller increase than January’s 0.4%. However, the annual increase is expected to remain steady at 2.8%, the same level as January. Since the Consumer Price Index (CPI) exceeded expert expectations for two consecutive months in January and February this year, attention is focused on the PCE price trend. However, since the 29th is Good Friday, a holiday before Easter, market reactions to the inflation data are expected to be confirmed after the New York stock market opens on April 1.

CEO Straub predicted, "If the PCE price index released on the 29th meets or comes close to expectations, the Fed is likely to cut rates three times this year."

Government bond yields are slightly higher. The U.S. 10-year Treasury yield, a global bond yield benchmark, rose slightly from the previous day to 4.2%, while the 2-year Treasury yield, sensitive to monetary policy, rose 3 basis points (1bp = 0.01 percentage points) to around 4.6%.

International oil prices are strong due to supply concerns. West Texas Intermediate (WTI) crude oil rose $0.89 (1.1%) to $82.24 per barrel, and Brent crude rose $0.91 (1.1%) to $87 per barrel.