Growing concerns about further interest rate hikes, prompted by fresh economic data, reversed early-week gains and left stocks mixed for the week.
The Dow Jones Industrial Average slipped 0.13%, while the Standard & Poor’s 500 fell 0.28%. The Nasdaq Composite index advanced 0.59% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.52%.1,2,3
Rate Concerns Weigh on Stocks
Stocks opened last week higher on investor hopes that a continued cooling in inflation might support a more dovish Fed. A higher-than-expected rise in the Consumer Price Index (CPI) and strong retail sales in January initially did little to dent that enthusiasm, as stocks posted solid gains through Wednesday’s close.
But that optimism faded on Thursday as a surprising rise in producer prices and another decline in initial jobless claims triggered worries the Fed would stay the course for longer. Comments from two Fed officials supporting a more aggressive rate hike stance added to the unease, erasing much of the week’s gains. Stocks ended mixed on Friday, capping a choppy week.
Inflation Moderation Pauses
Consumer prices climbed 0.5% in January, fueled by rising shelter costs and energy prices. The increase in the CPI was higher than the 0.1% rise in December and slightly above the consensus estimates of 0.4%. The year-over-year inflation number (6.4%) came in lower than December’s 12-month rise of 6.5%, making it the seventh consecutive month of declining year-over-year inflation.4
January’s product price report showed a surprise 0.7% increase, higher than the 0.4% rise expected by economists and the biggest jump since June. Year-over year, producer prices rose 6.0%, a slight improvement from December’s number.5
This Week: Key Economic Data
Tuesday: Purchasing Managers’ Index (PMI) Flash. Existing Home Sales.
Wednesday: FOMC Minutes.
Thursday: Jobless Claims. Gross Domestic Product (GDP).
Friday: New Home Sales. Consumer Sentiment.
Source: Econoday, February 17, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Walmart, Inc. (WMT), The Home Depot, Inc. (HD), Palo Alto Networks, Inc. (PANW).
Wednesday: eBay, Inc. (EBAY), The TJX Companies, Inc. (TJX), Nvidia Corporation (NVDA), Diamondback Energy, Inc. (FANG).
Thursday: Block, Inc. (SQ), Pioneer Natural Resources Company (PXD).
Friday: EOG Resources, Inc. (EOG).
Source: Zacks, February 17, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
SFG News & Events
In honor yesterday being Presidents Day, we thought we’d share a quote from Abraham Lincoln
“In the end, it is not the years in your life that count. It is the life in your years.”
We hope you enjoyed your day off celebrating the Presidents who shaped our nation!
Food For Thought
“Thinking about what you can\’t control only wastes energy and creates its own enemy”
-Sandy Fries
Tax Tip
The Two Types of IRS Volunteer Programs
Every year, IRS-certified volunteers help people file their tax returns accurately. This volunteer opportunity is perfect for people who want to learn more about tax preparation, need to earn continuing education credits, or want to give back to their community.
The IRS offers the Volunteer Income Tax Assistance program (VITA) and the Tax Counseling for the Elderly program (TCE). VITA offers free help to people who generally earn $60,000 or less, people with disabilities, and limited English-speaking taxpayers. TCE is mainly for people aged 60 or older. Although the program focuses on tax issues unique to seniors, most taxpayers can get free assistance.
*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov5
Healthy Living Tip
4 Potential Benefits of Aloe Vera
Aloe vera is quite a robust plant! Not only is it safe to eat and used in many cosmetic products, but it also has many benefits that stem (pun intended) outside its typical uses.
Here are four potential benefits of Aloe vera:
One study found that Aloe vera is just as effective as mouthwash at reducing plaque.
Aloe vera flower and leaf extracts may have antioxidant properties.
Aloe vera may help lower blood sugar levels for people with type 2 diabetes.
Aloe may help with burn wounds. Patients with burn wounds treated with Aloe vera healed significantly quicker compared to a group not treated with Aloe vera.
In addition to the above benefits, many people use Aloe vera to soothe sunburns, dry skin, and cuts.
Tip adapted from Every Day Health6
Weekly Riddle
They have no bodies, but you could say they have tails and heads. What are they?
Last week’s riddle: What is the beginning of sorrow and the end of sickness? Something you cannot express happiness without? Something that is always in risk, but never in danger? Answer: The letter “s.”
Footnotes and Sources
1. The Wall Street Journal, February 10, 2023
2. The Wall Street Journal, February 10, 2023
3. The Wall Street Journal, February 10, 2023
4.The Wall Street Journal, February 7, 2023
5. IRS.gov October 20, 2022
6 EveryDayHealth.com July 8, 2022
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with Stuart Financial Group, J.W. Cole Advisors, Inc., nor state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
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