2-28-24-SPY

The markets are strong, the HCM-BuyLine® is positive, and pullbacks should be seen as buying opportunities. Technology, small caps and the financial sector are what we see as the three areas that could have higher odds of outperformance in 2024.

The growth rate of the U.S. economy in the fourth quarter was downgraded slightly to a 3.2% annual pace, but the economy is still expanding at a rapid clip and showing few signs of slowing down. Originally the government said gross domestic product had expanded at a 3.3% rate in the final three months of 2023. The figure is adjusted for inflation.

41 companies are reporting this week. Of the 474 companies that have reported so far (95% of the S&P 500): Overall, 77% are beating estimates, and those that “beat” are beating by a median of 7%. Of the 23% missing, those are missing by a median of -6%.

The Conference Board’s Consumer Confidence Index fell 4.2 points in February to 106.7, below the consensus of 115.1. This was the first decline in four months, and came on the back of a downward revision to the previous month, indicating that the increase in confidence around the turn of the year was less than previously thought. Nevertheless, the level of confidence is still higher than a year ago and remains consistent with continued economic expansion.

In February, confidence declined across most demographic and income categories. Both the present situation and consumer expectations weakened. Current business and labor market conditions softened, but remained in net positive territory. Expected business conditions and job availability, however, worsened and both were in net negative territory. Even so, consumer income expectations improved.

Likely related to the more positive outlook for income growth, consumer purchasing plans for autos and appliances in the next six months improved, and they did so by more than typical for this time of year. Home buying plans, however, continued to weaken, edging down to their lowest level since July 2022

Inflation expectations for the next 12 months edged down, but continued to run higher than pre-pandemic.