Investors get a break on Monday, February 20th as the markets are closed for the Presidents Day federal holiday.
Year to date (YTD) (a)
S&P 500 +6.24%
NASDAQ +12.62%
Dow 30 +2.05%
Sector Performance – 3 Month (b)
Communication Services +7.30%
Information Technology +6.03%
Consumer Discretionary +5.52%
Real Estate +4.95%
Industrials +4.27%
Financials +3.23%
Materials +1.54%
Consumer Staples -0.14%
Utilities -0.19%
Health Care -0.72%
Energy -8.58%
Treasury Yield (10 years) (a)
3.82%
US National Debt (c)
$31,552,540,000,000
News
Consumer Price Index (d)
All items index came in at 6.4% from 6.5% year-over-year and rose 0.5% month-over-month (biggest increase in 3 months)
All together headline numbers were higher than expected. “The index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase, with the indexes for food, gasoline, and natural gas also contributing.”
Super Core Inflation (e)
Rose 0.2% in January
What is super core inflation? It refers to the rate of inflation in the services sector after stripping out Food, Energy and housing costs (medical costs, wages, labor costs, retail, banking, etc.). The Federal reserve values this output and has used it as a key reference for their rate hike decisions. “This may be the most important category for understanding the future evolution of core inflation,” Powell said in November. “Because wages make up the largest cost in delivering these services, the labor market holds the key to understanding inflation in this category.”
6-month Treasury Yield (f)
6 month U.S. treasury bills climbed over 5% on Tuesday after the inflation data was released. This is the first time yields have been seen this high since 2007.
“Why it matters: It’s the first time since 2007 — during the go-go days before the Great Recession — that U.S. government securities were sporting a so-called 5-handle.”
Retail Sales (g)
Rose 3% in January
Retail sales came in much higher than expected. The estimate was an expected increase of 1.9%.
“The monthly reports on industrial production, retail sales, and jobs were generally better than expected and point to a pickup in economic activity in early 2023 after a soft patch in late 2022. The Fed will read recent activity reports as supporting plans for additional interest rate increases in the first half of this year,”
Producer Price Index (h)
Rose 0.7% in January
Inflation came in higher than expected at the wholesale level climbing higher than 0.4% that was estimated.
In conclusion…
Last week provided us with a mixed set of economic data results. These numbers are especially important in todays economic environment as the Federal Reserve is trying to battle inflation and bring it down to its target 2% level.
Quote (I)
“Blessed are the young for they shall inherit the national debt.”
– Herbert Hoover
(a) https://finance.yahoo.com/
(b) https://eresearch.fidelity.com/eresearch/goto/markets_sectors/landing.jhtml
(f) https://www.axios.com/2023/02/16/treasuries-yield-more-than-5-percent-first-time-since-2007
(h) https://www.cnbc.com/2023/02/16/producer-price-index-january-2023-.html
(I) https://www.brainyquote.com/quotes/herbert_hoover_110353
