Weekly Market Insights: Market Retreats on Inflation, Economic Reports
Last week, stocks experienced a decline as investors reacted to several disappointing economic reports, particularly inflation updates that fell short of expectations.
Stocks Snap Winning Streak
Markets were quiet Monday but opened lower Tuesday in response to the January inflation report that showed higher-than-expected consumer prices. But stocks regained some momentum on Wednesday and rallied Thursday despite disappointing reports on both retail sales and industrial production for January.12
News of higher-than-expected wholesale prices on Friday put investors back on edge and kept stocks from ending the week on a positive note. The weekly loss broke a five-week winning streak.3
Source: YCharts.com, February 17, 2024. Weekly performance is measured from Monday,
February 12, to Friday, February 16.
ROC 5 = the rate of change in the index for the previous 5 trading days.
TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.
Treasury note yield is expressed in basis points.
Inflated Perspective
Consumer Price Index data was one of the big pieces of news driving markets last week, with January’s numbers coming in at 3.1 percent compared to a year prior—cooler than December’s 3.4 percent year-over-year gain but warmer than the 2.9 percent consensus. Jittery Investors focused on the hotter-than-expected part.4
With the consumer report closely followed by disappointing inflation news on the producer level, attention quickly shifted to the Fed and what’s next for interest rates. While the Fed has indicated short-term rates may trend lower in 2024, the January inflation reports support Fed Chair Powell’s recent comments that the Fed is in no hurry to cut rates
This Week: Key Economic Data
- Tuesday: Leading Indicators
- Wednesday: FOMC Meeting Minutes
- Thursday: Jobless Claims, Existing Home Sales, U.S. Fed Balance Sheet
Source: Investors Business Daily – Econoday economic calendar; February 15, 2024
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: NVIDIA Corporation (NVDA)
- Thursday: Intuit Inc. (INTU), Booking Holdings Inc. (BKNG)
- Friday: Berkshire Hathaway Inc. (BRK.A, BRK.B)
Source: Zacks, February 15, 2024
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.
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*This information is not intended to be a substitute for specific, individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov5
Footnotes and Sources
- The Wall Street Journal, February 13, 2024 ↩︎
- CNBC, February 16, 2024 ↩︎
- The Wall Street Journal, February 15, 2024 ↩︎
- The Wall Street Journal, February 13, 2024 ↩︎
- IRS.gov, April 7, 2023 ↩︎
CAPATA Financial LLC offers wealth management services through various unaffiliated companies including advisory services offered by Diversify Advisory Services (“Diversify”) an SEC registered investment adviser. CAPATA Financial LLC offers additional investment services and securities through DFPG Investments, LLC., a broker/dealer, member FINRA / SIPC, and an affiliate of Diversify.
