January 20, 2023, Weekly Stock Market Return Recap. The S&P 500 declined -0.7%, the Dow fell -2.7% and the Nasdaq rose +0.6% on the week. The fourth quarter earnings season for the S&P 500 is not off to a strong start: of the 11% companies that have reported only 67% have reported earnings above estimates, which is below the 5-year average of 77%. The weekly economic news showed weaking with the Producer Price Index ("PPI") for December with a decrease in costs, down 0.5% from the prior month while December retail sales dropped sharper than expected as consumer spending slowed in the traditionally strong holiday season. Federal Reserve Bank of Cleveland President Loretta Mester said inflation growth is finally starting to slow but interest rates need to rise above 5%. Recall, Fed Chair Powell comments on 1/10 Tues, Fed taking 'measures that are not popular' to rein in inflation.
January 13, 2023, Weekly Stock Market Return Recap. The US equity indexes all jumped on the week led by the Nasdaq +4.8%, followed by the S&P 500 +2.7% and Dow Jones +2.0%. The market expectations for an early than conveyed interest rate pause by the Fed continues to seesaw, but now with the expectation that the Fed’s hawkish stance will cave earlier. December’s CPI report showed prices continue to eke downward, by 0.01%, heightening hopes the Fed may pause rate hikes sooner than its current stance. Also, early signs of earnings strength by banks and airlines show the bottom lines in these sectors remain healthy. We believe the stock market will continue to be impacted more by sentiment waves attached to what the Fed may, or may not do, with rate increases this year.
January 6, 2023, Weekly Equity Market Recap. The first week of January for the S&P 500 was marked by consistent declines then after a strong recovery on Friday, finishing positive +1.45%. Indeed, stocks on Friday were moved sharply higher by softer U.S. wage data and an unexpected contraction in the Institute of Supply Management's December services reading. However, the performance results likely come to no surprise to investors given a recent survey found that over half of US investors were so terrified about portfolio losses that they checked their retirement balances three times a week.