Market Musings 3/12/2024

Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!

The S&P 500 surged 5% in February extending the market rally to four months. We’re seeing similar optimism in March so far, but with a lot more hesitation.

πŸ₯° AI-Smitten February

Market euphoria continued unabated in February with the #AI hype train rolling all month. #AI bellweather Nvidia knocked another earnings and outlook out of the park while other server supply chain names piled on highlighting strong demand driven by the #AI infrastructure buildout.

The #AI hype overshadowed some macro weakness with inflation starting to reaccelerate. However, under the cover of #AI, markets have adjusted some #RateCuts expectation now for 3 to 4 cuts starting in June.

πŸ€ March Macro Madness

Thus far, market have been volatile in March and returned to a macro focus. #LaborMarkets have been mixed and the recent February CPI came in slightly hotter again. The short-term inflation trends has the 3-month CPI annualized back above 3% again.

However, we also continue to see #AI bullishness. Markets were essentially flat MTD before today’s run. However, investors continue to see everything as a glass half full with a #Goldilocks soft landing base case powered by #AI demand and #RateCuts.

Despite today’s pop, we expect more volatility through the rest of the month dominated by shifting #RateCuts expectations. We continue to expect the US economy to bottom this year into a mild recession (not soft). We see the market a little ahead of itself right now, but longer-term believe we’re already well into the next bull market.

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As of the publish date, Ursa portfolios may own NVDA. The stocks mentioned in this article may cease to be owned by Ursa portfolios at any point.

The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.

Original Photo by Tara Winstead.