CWS Market Review – March 29, 2024
“The more a man really knows about speculation, the less certain he becomes in regard to any market movement.” – Charles Dow
Since Wall Street is closed today for Good Friday, the first quarter of trading of 2024 came to an end at the closing bell on Thursday.
Overall, Q1 was a very good one for stock investors. The S&P 500 finished the quarter at 5,254.35, which is an all-time high. This was the index’s 22nd record close this year. The Dow Jones Industrial Average also closed at a record high of 39,807.37.
For the quarter, the S&P 500 gained 10.16%. If we include dividends, it was up by 10.56%. That’s very good for just three months. This was the best Q1 for the index since 2019. It was also a broad rally as well. Except for REITs, every sector was up for the quarter.
Historically, a good Q1 has been a strong indicator for the bulls to hang around. The WSJ notes that when the S&P 500 gains more than 8% for the first quarter, it has finished higher for the rest of the year 94% of the time, with an average gain of 9.7% for the final three quarters.
Ever since the Federal Reserve turned dovish last October, Wall Street has been in its happy place. Over the last five months, the S&P 500 has added more than $9 trillion in market value.
Here’s a look at the quarterly gains for the S&P 500:
The rally is causing Wall Street to up its forecasts for this year. Oppenheimer just raised its year-end target for the S&P 500 to 5,500. RBC Capital Markets lifted its target to 5,300. Goldman Sachs said the index “could” reach 6,000 before the end of the year.
(I’m not a fan of these target prices. Once I was on a radio show and was asked what my year-end target was. I said December 31. I haven’t been invited back.)
Some stocks did very well during Q1. Nvidia, for example, gained 82%. NVDA was the second-best performing stock in the S&P 500, trailing only Super Micro Computer’s gain of 255%.
Tesla, on the other hand, was the worst-performing stock in the entire S&P 500 during Q1, with a loss of 29%. No one falls out of love quite like Wall Street. The electric-vehicle kingpin is lower today than it was three years ago.
In this week’s issue, I want to preview the Q1 earnings season. The first earnings reports will start trickling in in about two weeks, and by the end of April, the trickle will turn into a pour. I also have some Buy List updates for you.