The Pulse on the Economy and Capital Markets: March 2024

To Summarize: Stock markets are shifting in favor of sectors who benefit from stickier inflation and away from tech-dominated returns. Contrary to perceptions, most consumers remain healthy signaling future spending. Capital markets are open and have led to an increase in corporate growth and M&A activity. We unpack this and more in the March edition of The Pulse.

In the Markets: Big tech’s dominance of the stock market has wavered recently as global and emerging markets take the lead. Without the heavy tech bias, the equal-weighted S&P 500 has been performing better than the Nasdaq this month. Despite a broadening performance by the markets, recent economic and inflation news suggests that there will be fewer interest rate cuts than initially expected this year. Sectors that benefit from stickier inflation, such as energy, utilities, and materials, will continue to outperform big tech companies.

Robust Consumers: Contrary to perceptions, consumer balance sheets and wage data points toward an overall relatively healthy consumer, which will benefit future spending. Consumer assets and net worth has grown, particularly for homeowners, and as a result, consumers have more confidence in their spending decisions.

Capital Markets Soar: Financial conditions for those looking to raise capital from equity, debt, and other financial markets has surged under the expectations that the Fed rate hikes were over. Growing confidence from CFOs and open capital markets have led to optimism in funding corporate growth and M&A activity.

Top Headlines: We’re reading about how doctors are leveraging generative AI, restaurant chains, such as McDonalds, look to the Sun Belt for future growth opportunities, apartment rent growth remains reserved for the month of February, and the price of copper surges as iron ore shows signs of economic risk.

Related resources:

• Doctors are turning medical generative AI into a booming business
• McDonalds and other restaurant chains look to the Sun Belt for growth as population soars
• Apartment Rent Growth Remains Aloof in February as Occupancy Stabilizes
• Copper Surges on Supply Threat as Iron Ore Shows Economic Risks