Did you know the dot-com bubble of the late 1990s into 2000 saw the NASDAQ Composite index rise over 400% before losing more than 78% of its value by October 2002?

This shows just how fast the stock market can move, but don’t forget that it can be equally slow at times, and that is not in any way a reason to panic.

Today’s edition of Equity Eats offers a snapshot of the following events:

• Waller In No Rush To Cut: First, Christopher Waller highlights the balance between economic growth and inflation, advising caution in monetary policy adjustments 🐌

• What If The Fed Doesn’t Cut Rates In 2024: Next, we discuss the potential of the Fed maintaining current interest rates through 2024, examining its impact on equity markets and investors 🤔

• The Stars And The Pigs: Finally, a brief look at the first quarter shows significant gains and losses among key players, driven by the AI boom and other factors ⭐🐷

Equity Eats is your guide through today's economy, providing clear, concise analysis to help you make informed decisions.

Waller In No Rush To Cut 🐌

“I see economic output and the labor market showing continued strength, while progress in reducing inflation has slowed,” Fed member Christopher Waller said at an evening event in New York organized by the Economic Club of New York.

“Because of these signs, I see no rush in taking the step of beginning to ease monetary policy” 🥱

January and February inflation readings surprised to the upside, while job growth and other economic indicators showed broad strength–hardly an economy in need of rescuing by looser monetary policy.

Waller said he continues to expect that inflation will trend toward the Fed’s 2% annual target and that it will be appropriate for the central bank to lower interest rates this year.

But the burden of proof is higher after the hot start to 2024.

The March inflation report due on Wednesday will be a key input to the Fed’s thinking 📊

What If The Fed Doesn’t Cut Rates In 2024? 🤔

This isn’t an unimaginable scenario given the economy’s persistent strength, and recent higher-than-expected inflation readings.

And it wouldn’t be the end of the world for equity investors 🤯

Economists and market strategists have consistently underestimated the strength of the economy over the past year.

The labor market has loosened over the past year but remains strong.

Real wages are rising at a healthy clip.

All eyes will be on March and April data on inflation data.

If it resembles releases for January and February, interest-rate reductions will become increasingly unlikely in 2024 ❌

While nowhere close to a consensus view, the idea of no cuts in 2024 has started to creep ever so slowly into the margin of the possible Fed paths going forward.

But stronger growth means higher earnings from more industries and companies.

That’s a recipe for a broadening out of the stock market rally 📣

Bond yields would rise somewhat in a zero interest rate cut scenario, but stronger earnings growth would allow equities to remain firm.

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The Stars And The Pigs ⭐🐷

Stock markets have recorded a strong first quarter, with the Dow Jones Industrials Average gaining 5.5%, the S&P 500 up nearly 10%, and the Nasdaq up 8.6%.

The moves have in part been driven by the ongoing artificial-intelligence frenzy 🤖

One AI stock really has shined in the first three months of the year.

Walt Disney was the top performer stock in the Dow index in the first quarter, rising 34% following several years of poor performance.

Boeing was the worst performer in the Dow during the first quarter; its shares tumbled 26% in the quarter 💥

Super Micro Computer led the S&P 500 with a 260% gain in the quarter as investors continue to bet on the future of generative artificial intelligence.

Super Micro joined the S&P 500 on March 18.

Tesla was the worst performer in the S&P 500 in the first quarter, with shares dropping 28%, their worst quarter since December 2022.

The electric-vehicle maker has struggled with competition and slowing demand 📉

As for the Nasdaq, Nvidia was the top performer, rising by 82%.

Sirius XM Holdings was the worst performer in the Nasdaq, falling 29%.

However, Sirius XM is expected to close its merger with Liberty Sirius XM in 3Q and Warren Buffet has been buying the stock, so dismal performance is not always a good indicator of what the future may bring 👀

Inner Circle Macro Update 🔍

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