TRG Fast Facts

By TRG Advisors on March 8, 2024

Weekly data-driven insights on the markets and economy

1. Applying Pressure

The S&P 500 added 0.4% on Wednesday, while the Nasdaq rose 0.6%. The Dow climbed only 0.14%, weighed down by the drop of more than 2% in Disney. After two straight days of declines, investors have tried to push the market higher. Traders kept an eye on the first of two Capitol Hill appearances from Federal Reserve Chair Jerome Powell this week as he addresses the potential of rate cuts in 2024.[i]

2. Future Focused

The Fed’s comments on the future of rates also led the 10-year Treasury yield to fall nearly 3 bps on Wednesday to 4.11%. The 2-year rose less than 1 bp to 4.56%.[ii] Meanwhile, the 30-year climbed 1.8 bps to 4.25%.[iii]

3. Working Hard

Private sector job growth improved February, though growth was slightly less than expected. Companies added 140,000 positions for the month, up from the 111,000 in January, but below the estimated 150,000. The leisure and hospitality sectors led in job gains, with 41,000, followed by construction with 28,000. Of the total, 110,000 jobs came from the services sector while goods producers added 30,000. The Labor Department’s February non-farm payroll report will be released Friday.[iv]

4. Holding Steady

Federal Reserve Chair Powell said on Wednesday that the Fed will hold rates steady in March due to the strength in the economy and the labor market. Previously, markets had widely expected the Fed to ease up aggressively following the 11 interest rate hikes (5.25 percentage points) that spanned March 2022 to July 2023. However, futures market pricing points to the first rate cut in June. Inflation is heading toward the Fed’s 2% target – currently at 2.4%.[v]

5. Competition in China

Tesla and Apple are seeing the effects of slowing sales in China. Shares in Tesla fell more than 7% on Monday after declining February sales in China. Tesla sold 60,365 China-made vehicles in February, down 19% from a year earlier and the lowest volume since December 2022.[vi] Apple’s iPhone sales in China fell 24% year-over-year so far in 2024, as it faced domestic rivals like Huawei, which saw unit sales rise by 64% in the same period. Shares of Apple closed 2.8% lower on Tuesday and have lost about 12% of their value so far this year, underperforming big tech peers in the U.S.[vii]

6. Golden Ticket

Gold futures saw high levels on Friday and soared even higher on Monday as traders bet the Fed would start cutting rates in the second half of 2024. The gold contract for April rose $30.60, or 1.46%, to settle at $2,126.30 per ounce. This is the highest level dating back to its creation in 1974. The VanEck Gold Miners ETF closed higher by 4.3% for a third consecutive day of gains.[viii]

7. Bump in Bitcoin

Bitcoin reached a new all-time high for the first time in more than 2 years on Tuesday, topping $69,210, then quickly pulled back to trade 8% lower, at $61,973. Bitcoin is up 45% this year already, leading investors to caution that things could soon cool.[ix] On Wednesday, shares of MicroStrategy were trading around $1,227, up nearly 17% on the day.[x] Coinbase stock surged more than 11% on Monday, hitting a new high, then dropped just 1.1% on Tuesday.[xi]

8. Box Office Breakout

Dune: Part Two stormed the North American box office, earning $81.5 million in ticket sales and $97 million in sales globally, bringing its debut to $178.5 million. Released in 4,071 locations Dune 2 received a Rotten Tomatoes score of 94%, the highest PostTrak marks and an A CinemaScore. Men accounted for 59% of opening weekend ticket buyers, helping the producers recoup that nearly $190 million production budget.[xii]

[i] Harring, Alex and Lisa Kailai Han, “S&P 500, Nasdaq bounce following sell-off: Live updates,” CNBC, March 6, 2024, https://www.cnbc.com/2024/03/05/stock-market-today-live-updates.html. Accessed March 6, 2024.

[ii] Li, Yun, Alex Harring and Sophie Kinderlin, “10-year Treasury yield dips as Powell reiterates cautious rate-cutting stance to Congress,” CNBC, March 6, 2024, https://www.cnbc.com/2024/03/06/us-treasury-yields-investors-look-to-powell-testimony.html. Accessed March 7, 2024.

[iii] Chisholm, Jamie, “Treasury yields inch higher ahead of more Powell testimony, looming jobs data,” Morningstar, March 7, 2024, https://www.morningstar.com/news/marketwatch/20240307236/treasury-yields-inch-higher-ahead-of-more-powell-testimony-looming-jobs-data. Accessed March 7, 2024.

[iv] Cox, Jeff, “Private payrolls rose by 140,000 in February, less than expected, ADP reports,” CNBC, March 6, 2024, https://www.cnbc.com/2024/03/06/adp-jobs-report-february-2024.html. Accessed March 7, 2024.

[v] Cox, Jeff, “Powell reinforces position that the Fed is not ready to start cutting interest rates,” CNBC, March 6, 2024, https://www.cnbc.com/2024/03/06/powell-reinforces-position-that-the-fed-is-not-ready-to-start-cutting-interest-rates.html. Accessed March 7, 2024.

[vi] Jin, Hyunjoo, “Tesla shares skid after China sales fell to the lowest level in over a year,” Reuters, March 4, 2024, https://www.reuters.com/business/autos-transportation/tesla-shares-skid-after-february-china-sales-slump-2024-03-04/. Accessed March 7, 2024.

[vii] Mo, Yelin and Brenda Goh, “Apple’s iPhone sales in China plunge 24% as Huawei’s popularity surges,” Reuters, March 5, 2024, https://www.reuters.com/technology/apples-china-iphone-sales-plunge-24-first-six-weeks-2024-report-says-2024-03-05/. Accessed March 7, 2024.

[viii] Kimball, Spencer, “Gold rises above $2,100 to highest level ever as traders bet on interest rate cuts,” CNBC, March 4, 2024, https://www.cnbc.com/2024/03/04/gold-rises-above-2100-to-highest-level-ever-as-traders-bet-on-interest-rate-cuts.html. Accessed March 7, 2024.

[ix] Machell, Tanaya, “Bitcoin rises to record above $69,000, then quickly tumbles 8%,” CNBC, March 5, 2024, https://www.cnbc.com/2024/03/05/bitcoin-all-time-high.html. Accessed March 7, 2024.

[x] Crawley, Jamie, “MicroStrategy Upsizes Convertible Debt Offering to $700M to Buy Even More Bitcoin,” Coindesk, March 6, 2024, https://www.coindesk.com/markets/2024/03/06/microstrategy-upsizes-convertible-debt-offering-to-700m-to-buy-even-more-bitcoin/. Accessed March 7, 2024.

[xi] Lehtonen, Scott, “Dow Jones Falls As Apple Slides On iPhone Sales; Cathie Wood Sells $30 Million Of Coinbase Stock,” Investor’s Business Daily, March 7, 2024, https://www.investors.com/market-trend/stock-market-today/dow-jones-nasdaq-sp500-cathie-wood-coinbase-stock/. Accessed March 7, 2024.

[xii] Bahr, Lindsey, “‘Dune: Part Two’ delivers on box-office promise, surpassing $178 million in global debut: ‘A cinematic event’,” Fortune, March 3, 2024, https://fortune.com/2024/03/03/dune-part-two-delivers-on-box-office-promise/. Accessed March 7, 2024.