*The Dow Jones and S&P 500 Index hit a new historical closing high
*OPEC, geopolitical and global demand are driving up oil prices by 16% this quarter
*Spot gold hit a record high during trading
On March 28th local time, the three major stock indexes in the United States closed with mixed gains and losses. The technology, consumer goods, and consumer services sectors dragged down the overall trend, with the Dow Jones and S&P 500 reaching new historical closing highs. On the one hand, investors continue to wait for GDP and PCE data to be released on Friday to understand inflation trends. On the other hand, some argue that the sell off of year-end pension fund assets has a negative impact on the stock market.
As of the close of the day, the Dow Jones Industrial Average rose 47.29 points, or 0.12%, to 39807.37 points; The Nasdaq Composite Index fell 20.06 points, or 0.12%, to 16379.46 points; The S&P 500 index rose 5.86 points, or 0.11%, to 5254.35 points.
Due to Friday's long holiday, the US stock market closed early on the weekly, monthly, and quarterly lines. Looking back at the market performance this quarter, growth stocks performed better than value stocks, with the Nasdaq up 9.1%; The S&P 500 index rose 10.2%, marking its best start since 2019; The Dow Jones Industrial Average rose 5.6%, marking its strongest first quarter performance since 2021.
Focusing on large technology stocks, thanks to the continuation of the artificial intelligence wave, Nvidia rose 82% in the first quarter and its market value increased by over 1 trillion US dollars; Apple has fallen more than 10%, while Tesla has fallen 29%; Microsoft rose 12%, firmly holding the top spot in the US stock market value.
Recently, the volatility of the US stock market has intensified, and the quarter end rebalancing of pension funds is considered the main reason. The so-called quarter end rebalancing refers to the regular and irregular reallocation of assets based on principles such as risk parity and fixed weights. That is to say, a fixed weight investment portfolio must rebalance its asset exposure to take into account past quarter market fluctuations. According to the Goldman Sachs model, US pension funds need to sell $32 billion in US stocks to purchase bonds, which is the largest rebalanced cash flow since June 2023.
Historical data shows that after experiencing similar scale rebalancing last year, US stocks fell for three consecutive months. Whether this pattern will be repeated this year has attracted close attention of the market.
Dubrovko Lakos Bujas, Chief Global Equity Strategist at JPMorgan Chase, said that the best performing stocks in the US stock market are overcrowded, increasing the risk of an impending pullback.
&Amp; Quota; The stock market crash may suddenly occur one day. This situation has occurred before& Amp; Quota; Bukhas said.
In terms of economic data, the final revised data released by the US Department of Commerce on the 28th showed that the US real GDP in the fourth quarter of 2023 grew at an annual rate of 3.4%, an increase of 0.2 percentage points from the previously released revised data. This update mainly reflects an increase in consumer spending and non residential fixed investment, but is partially offset by a decrease in private inventory investment.
At the same time, the annualized quarterly rate of the core PCE price index for the fourth quarter, which was announced, was 2%, expected to be 2.1%, and the previous value was 2.1%; The final annual rate of the core PCE price index in the fourth quarter was 3.2%, compared to the previous value of 3.2%.
In addition, the US Department of Labor announced on the same day that as of March 23, there were 210000 initial jobless claims for the week, with an expected number of 212000, compared to the previous value of 210000. As of March 23, the average number of initial claims for unemployment benefits for the week was 21000, compared to the previous value of 212500.
The core PCE price index for February in the United States will be released on Friday, after January data showed the largest month on month growth in core PCE in nearly a year. Federal Reserve Chairman Powell will also deliver a speech on Friday.
In terms of individual stocks, Walgreens Boots Alliance, a US pharmacy supermarket chain, closed up 3.19%, with earnings per share of $1.20 in the second quarter of fiscal year 2024, and market expectations of $0.82. Revenue increased by 6.3% year-on-year to $37.05 billion, with a market expectation of $35.86 billion.
In the commodity market, the price of gold futures for June delivery on the New York Mercantile Exchange rose 1.2% to $2238.40 per ounce. Spot gold hit a record high of $2225 during trading and achieved its best monthly performance since July 2020, with a cumulative increase of 9% in March. Daniel Ghali, commodity strategist at Dao Ming Securities, said that traders& Quota; Adjust the position before the Easter holiday, and (increase) the trading activity near the end of the month and quarter; Quota;, This has boosted the price of gold. Ghali added that if the market starts to expect a larger rate cut from the Federal Reserve's rate cutting cycle, gold may further rise,
The price of WTI crude oil futures contracts for delivery in May increased by $1.82 to close at $83.17 per barrel, an increase of 2.24%, with a cumulative increase of 16% for this quarter. Analysts say that OPEC+will extend its production reduction measures until the end of June, supporting expectations of a decrease in global inventories. The attack on Russia's energy infrastructure, geopolitical tensions in the Middle East, and global demand growth have also boosted oil prices.