Market Recap: Robust Job Growth, Powell’s Rate Cut Outlook, Record Share Buybacks

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Market Recap: Robust Job Growth, Powell’s Rate Cut Outlook, Record Share Buybacks

SPY
S&P 500

Last Week: -0.11%
YTD: 7.66%
1 Year: 32.69%

DIA

Dow Jones Industrial Average

Last Week: -0.57%
YTD: 3.17%
1 Year: 22.46%

ONEQ
NASDAQ

Last Week: -0.70%
YTD: 7.14%
1 Year: 43.79% 

Russell 2000

Last Week: 0.55%
YTD: 3.05%
1 Year: 15.72% 

Large Growth

YTD: 9.22%
1 Year: 46.50% 

Large Value

YTD: 5.38%
1 Year: 18.46%

Employment

Job creation, which is measured by Nonfarm payrolls, increased by 275,000 in February. This came in above the analysts’ estimated number of 198,000. However, jobless rates increased by 3.9%, while the street was looking for 3.7%. The increase in jobless rates is still below the historical average. This upward tick may help cool off the hot January inflation data. The Fed board will review the mixed data when they meet next.

Fed Chairman Speaks

Fed Chair Jerome Powell spoke last week. He believes the Fed is still on track to cut interest rates this year despite the recent spike in inflation during January. On Wednesday, Powell said they are still waiting for more data showing inflation is sustainably cooling before taking the step of reducing rates. Due to the strength of the US economy, the labor market, and the progress so far in easing price growth, Powell stated that the Fed could carefully and thoughtfully approach rate cuts.

Share Buybacks

In February, we saw companies buying back stock shares at the highest rate since March 2023. Companies such as Meta, Disney, and Uber all announced plans to repurchase shares of their company stock. As earnings rise, buybacks often follow. These companies will first use the rise in profits to pay down debt, pay dividends, boost capital expenditures to reinvest in the company, and potentially buy back stock. Repurchasing outstanding shares reduces the number of shares on the open market, boosting investors’ stake in the company. It is viewed as a positive for investors, as it is a sign the companies feel they are in a robust financial position.
  • Alex Wolfe

    Alex is a Certified Financial Planner™. He brings nearly a decade of experience working with individuals, families, and business owners. Prior to working for Base Wealth Management, Alex worked for Fidelity Investments and an independent wealth management firm in Venice, FL. Through many years of practice, he specializes in helping clients navigate their financial goals through comprehensive financial planning. He received his bachelor’s degree in economics from Texas A&M University.

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