The second quarter of the year has begun with Wall Street feeling optimistic after a strong performance in the first quarter. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all posted impressive gains in the first quarter, with the S&P 500 seeing its best start to a year since 2019. Investors will be closely watching market reactions to the latest inflation data released on Good Friday, as well as other economic data releases throughout the week, culminating in the March jobs report on Friday.
Inflation rose in February in line with expectations, with the Fed’s preferred measure showing a 2.8% increase on a 12-month basis, excluding food and energy costs. This data is likely to influence the Federal Reserve’s decision-making at its upcoming meeting in May regarding interest rates. The central bank targets an annual inflation rate of 2%, but core PCE inflation has not reached that level in three years.
There is speculation surrounding who will succeed Bob Iger as the CEO of Disney, with Dana Walden, co-chair of Disney Entertainment, emerging as a potential front runner for the role. Bob Iger has delayed his retirement multiple times and returned to the role after the previous CEO, Bob Chapek, was fired in 2022. The company is closely following the succession plan as the appointment of the first female CEO in Disney’s history could be a significant milestone.
The price of gold reached a new record high following the latest PCE inflation data, with investors anticipating a potential rate cut by the Fed in June. Lower interest rates decrease the opportunity cost of holding gold, leading to increased demand for the precious metal. Spot gold hit an all-time high of $2,262.19 before retreating slightly, while U.S. gold futures climbed 1.7% to $2,275.60.
Sam Bankman-Fried, the founder of FTX, was sentenced to 25 years in prison for his involvement in securities fraud that led to the collapse of his cryptocurrency exchange and hedge fund. This sentence was less than what the prosecution sought but significantly more than what the defense proposed. Bankman-Fried was also ordered to pay $11 billion in forfeiture to the U.S. government. The judge noted the lack of remorse shown by Bankman-Fried and deemed him a potential risk in the future.
In conclusion, investors are keeping a close eye on market developments as they navigate the start of the second quarter. With key economic data releases and corporate news shaping trading sentiment, market participants are analyzing inflation trends, succession plans at major companies, and regulatory actions impacting the cryptocurrency space. The outlook for the markets remains positive, but uncertainties related to inflation, interest rates, and geopolitical events continue to pose risks.
