Another busy week of macro data will begin in the new quarter, after a volatile first quarter for stocks that ultimately ended in the black. The S&P 500 rose 7.03% for the first quarter ending Friday. The Nasdaq Composite closed up 16.77% while the Dow Jones Industrial Average advanced 0.38%. The winning quarter is all the more remarkable given the continued rate hikes by the Federal Reserve and the micro-banking crisis resulting from the Silicon Valley collapse. The market’s second quarter begins on Monday with the ISM manufacturing report, followed by factory orders data on Tuesday. Together, these readings provide insight into the industries that make the stuff, which make up about 11% of the US economy. We’re looking for a Goldilocks report: not too hot to stoke more inflation fears, but not too cold to intensify recession fears. For the ISM Report, we pay close attention to the “What Respondents Say” section, as it provides additional insight and color into what operators in various industries see on the ground. Wednesday’s ADP employment report is also important, given the Fed’s goal of slowing the labor market to bring down inflation. Thinking goes to fewer people working, less money to spend, less competition for goods, and less inflation. As a result, a slightly weaker figure than expected here is likely to be seen as positive by the market which remains at odds with the Fed’s view that there will be no need to cut interest rates before the end of the year. The market is certainly not quite as peaceful as it was a week ago. According to the Fed’s CME Monitor, the highest probability is for an exit of the year somewhere in the 425-475 bp range, above the 350-400 exit range from last week, but below the current target rate of 475-500 bp. The market is factoring in a little over 50% chance that we will see a 25 basis point increase before any cuts kick in. Oddly enough, next week’s most important economic release is when markets are closed on Good Friday: the Nonfarm Payrolls report. As has been the case for several months, we will be watching wage inflation closely, looking for more indications that inflation is underway. This means a lower number than the 4.6% annual increase seen in the February report. Within the portfolio, Constellation Brands (STZ) will report earnings next week, on the Thursday before the opening bell. Here are some other earnings reports and economic numbers to watch next week: Monday, April 3 Before the bell: Science Applications (SAIC) After the bell: 10:00 a.m. ET: ISM Manufacturing Tuesday, April 4 Before the bell: Sharpness Brands (AYI) , MSC Industrial Direct (MSM) after the bell: SMART Global (SGH) 10:00 a.m. ET: Factory Orders Wednesday, April 5 before the bell: Conagra Brands (CAG), Schnitzer Steel (SCHN), Simply Good Foods (SMPL) after The Bell: 8:15 a.m. ET: ADP Employment Report 10:00 a.m. ET: ISM Services Thursday, April 6 Before the bell: Constellation Brands (STZ), Lamb Weston (LW), RPM International (RPM) After the bell: Levi Strauss ( LEVI) and WD-40 (WDFC) 8:30 AM ET: Initial Claims Friday, April 7th Before the Bell: 8:30 AM ET: NFP Club Trades We only made one purchase: On Monday, we initiated a position in Foot Locker ( FL), where we bought 350 shares. Foot Locker is about 0.50% invested in the Jim Kramer Charitable Fund. We called this sneaker and sportswear retailer bullpen, on the belief that the stock can return to previous highs as CEO Mary Dillon implements her “Lace Up” turnaround strategy. A look back The most important macroeconomic update of the week, released on Friday, was the Personal Spending and Income report. While personal income grew slightly more than expected, rising 0.3% month-on-month against expectations for a 0.2% month-on-month increase, investors were comforted by a slightly weaker-than-expected annual increase in the core PCE price index. That reading, the Fed’s preferred measure of inflation, advanced 4.6% annually, just below the expected 4.7%. On Thursday, Initial Jobless Claims for the week ending March 25 came in at 198,000, an increase of 7,000 from the previous week and higher than the 195,000 expected. Also Thursday, the final GDP reading for the fourth quarter of 2024 was 2.6% annual growth for the economy, just below the previous estimate of 2.7%. On Wednesday, pending home sales for February showed an increase of 0.8% on the month, better than the expected 3% decline. Under the hood, all sectors closed higher for the week, led by energy and followed by consumer discretionary and real estate. Meanwhile, the US Dollar Index stands at around 102. Gold is trading at the higher level – $1,900 an ounce. WTI prices climbed back into the mid-$70s a barrel, while the yield on the 10-year Treasury rose to around 3.47%. No portfolio companies reported earnings this week. (See here for a full list of shares in Jim Cramer’s Charitable Trust.) As a subscriber of the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim places a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a share in his charity fund portfolio. If Jim talks about a stock on CNBC, he waits 72 hours after the trade alert is issued before executing the trade. The above investment club information is subject to our terms and conditions and privacy policy, along with our disclaimer. No fiduciary obligation or duty will be created, or created, by virtue of your receipt of any information provided in connection with Investment Club. There are no specific results or guaranteed profit.
A worker collects components at an auto parts facility in Charleston, South Carolina, US, on March 20, 2018.
Luke Charette | bloomberg | Getty Images
Another busy week of macro data will begin in the new quarter, after a volatile first quarter for stocks that ultimately ended in the black.
The S&P 500 rose 7.03% for the first quarter ending Friday. The Nasdaq Composite closed up 16.77% while the Dow Jones Industrial Average advanced 0.38%. The winning quarter is all the more remarkable given the continued rate hikes by the Federal Reserve and the micro-banking crisis resulting from the Silicon Valley collapse.