Market Week: February 19, 2024

The Markets (as of market close February 16, 2024)

Rising inflation heightened investor concerns that the Federal Reserve may not consider lowering interest rates during the first half of the year. Among the benchmark indexes listed here, only the small caps of the Russell 2000 and the Global Dow were able to gain ground. The Dow snapped a five-week winning streak, while the Nasdaq and the S&P 500 also finished the week lower. With the stock market closed on Monday for President's Day, investors will have to wait a little longer to try to begin another rally. Materials, utilities, financials, and industrials were better-performing sectors, while information technology and communication services lagged. Ten-year Treasury yields rose for the second straight week. Crude oil prices climbed higher, while the national average for regular gasoline jumped to a two-month high.

Last week began with what turned out to be a choppy day of trading. The Dow added 0.3% to hit a fresh record last Monday. The tech-heavy Nasdaq fell 0.3% and the S&P 500 dipped 0.1%. The small caps of the Russell 2000 jumped 1.8%, while the Global Dow gained 0.4%. Ten-year Treasury yields closed at 4.17%. Gold prices rose $0.17 to $77.01 per barrel. The dollar was flat while gold prices fell 0.2%.

Stocks closed sharply lower last Tuesday following a hotter-than-expected Consumer Price Index (see below). After reaching record highs, each of the benchmark indexes listed here declined. The small caps of the Russell 2000 fell 4.0%, the tech-heavy Nasdaq lost 1.8%, the Dow and the S&P 500 declined 1.4%, while the Global Dow dropped 0.9%. The latest inflation data probably prompted investors to reconsider their expectations of a rate cut by the Federal Reserve in March or May. Yields on 10-year Treasuries jumped 14.4 basis points to 4.31%. Crude oil prices advanced, gaining $0.88 to $77.80 per barrel. The dollar rose 0.7%, while gold prices decreased 1.3%.

Last Wednesday saw stocks rebound from the prior day's selloff. The Russell 2000 gained 2.4%, followed by the Nasdaq, which added 1.3%. The S&P 500 rose 1.0%, while the Dow and the Global Dow advanced 0.4%. Ten-year Treasury yields declined 4.9 basis points to 4.26%. Crude oil prices fell $1.37 to $76.60 per barrel, The dollar and gold prices slid lower.

Stocks continued to climb higher last Thursday led by the Russell 2000, which gained 2.5%. Investors assessed a slew of favorable corporate earnings centered around information technology, consumer spending, and energy. The Dow and the Global Dow added 0.9%, while the S&P 500 rose 0.6% and the Nasdaq advanced 0.3%. Ten-year Treasury yields dipped to 4.24%. Crude oil prices rose to $78.20 per barrel, up about $1.56 from the prior day's close. The dollar fell 0.4%, while gold prices rose 0.6%.

Most of the benchmark indexes listed here lost ground last Friday. The Global Dow proved to be the exception, eking out a 0.1% gain. The Russell 2000 fell 1.4%, the Nasdaq dropped 0.8%, the S&P 500 declined 0.5%, and the Dow slipped 0.4%. Ten-year Treasury yields added 5.5 basis points to close at 4.29%. Crude oil prices gained 1.5% to settle just shy of $80.00 per barrel. The dollar was flat, while gold prices rose 0.5%.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • The Consumer Price Index rose 0.3% in January, exceeding expectations with the largest monthly gain since September 2023. Core prices, excluding food and energy, rose 0.4% in January, 0.1 percentage point higher than the December increase. Despite the January increase, the 12-month rate declined from 3.4% to 3.1%, while core prices were unchanged at 3.9%. Prices for shelter, which rose 0.6% last month, contributed more than two thirds of the overall monthly increase. Food prices advanced 0.4%, while energy prices fell 0.9%. In addition to food and shelter, other areas which saw prices increase included motor vehicle insurance and medical care. Prices for used cars and trucks and for apparel were among those that decreased over the month. For the 12 months ended in January, prices for food rose 2.6% and shelter prices advanced 6.0%. Prices for energy declined 4.6%.

  • The Producer Price Index rose 0.3% in January after falling 0.1% in December. Since January 2023, producer prices have risen 0.9%. Last month, producer prices for services advanced 0.6%, the largest increase since July 2023. Prices for goods declined 0.2%. Producer prices less foods, energy, and trade services rose 0.6% in January, the largest advance since moving up 0.6% in January 2023. For the 12 months ended January 2024, prices for final demand less foods, energy, and trade services increased 2.6%.

  • Retail sales declined 0.8% in January from the previous month but were up 0.6% from January 2023. Retail trade sales were down 1.1% from December 2023 and 0.2% below sales from a year earlier. Nonstore (online) retail sales were up 6.4% from last year, while sales at food services and drinking places were up 6.3% from January 2023.

  • Both import prices and export prices rose 0.8% in January after declining 0.7% in December. The January increase in import prices was the first monthly advance since September 2023 and was the largest monthly increase since March 2022. Despite the January increase, import prices fell 1.3% over the past year and have not risen on a 12-month basis since January 2023. Import fuel prices increased 1.2% in January following declines of 7.7% in December and 6.3% in November. The January increase in export prices was also the first monthly increase since September 2023. Over the past 12 months ended in January, export prices decreased 2.4%.

  • Industrial production edged down 0.1% in January after recording no change in December. Manufacturing output declined 0.5% last month after increasing in both November and December. Mining fell 2.3%, while an increased demand for heating drove utilities up 6.0%. Total industrial production was identical to its year-earlier level. Within the manufacturing sector, durables edged up 0.1% in January, which was more than offset by manufacturing of nondurables, which fell 1.1%.

  • The Treasury budget deficit was $22.0 billion in January, down from December's $129.4 billion. January receipts were $477.3 billion, while expenditures were $499.3 billion. Through the first four months of the current fiscal year, the deficit sat at $531.9 billion, about $72.0 billion above the deficit over the same period last fiscal year. Last month, individual income taxes ($283.0 billion) contributed more than half of the total receipts, while Social Security and Medicare payments ($204.0 billion) represented the largest expenditures.

  • The number of building permits issued for residential construction decreased 1.5% in January from December but were 8.6% above the January 2023 figure. Building permits for single-family residential construction increased 1.6% last month. Housing starts fell 14.8% in January and were 0.7% under the January 2023 rate. Single-family housing starts also declined, falling 4.7%. January home completions were 8.1% below the December estimate but 2.8% above the rate from a year earlier.

  • The national average retail price for regular gasoline was $3.192 per gallon on February 12, $0.056 per gallon higher than the prior week's price but $0.198 per gallon less than a year ago. Also, as of February 12, the East Coast price increased $0.034 to $3.151 per gallon; the Midwest price rose $0.133 to $3.044 per gallon; the Gulf Coast price decreased $0.014 to $2.807 per gallon; the Rocky Mountain price advanced $0.045 to $2.791 per gallon; and the West Coast price increased $0.028 to $4.011 per gallon.

  • For the week ended February 10, there were 212,000 new claims for unemployment insurance, a decrease of 8,000 from the previous week's level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended February 3 was 1.3%, an increase of 0.1 percentage point from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended February 3 was 1,895,000, an increase of 30,000 from the previous week's level, which was revised down by 6,000. States and territories with the highest insured unemployment rates for the week ended January 27 were New Jersey (2.8%), Rhode Island (2.7%), Minnesota (2.5%), Massachusetts (2.4%), California (2.3%), Illinois (2.3%), Montana (2.2%), Alaska (2.1%), Connecticut (2.1%), Pennsylvania (2.1%), and Washington (2.1%). The largest increases in initial claims for unemployment insurance for the week ended February 3 were in Missouri (+1,921), Texas (+1,514), Colorado (+783), Illinois (+612), and Florida (+399), while the largest decreases were in Oregon (-4,561), California (-4,312), Ohio (-4,090), New York (-3,165), and Pennsylvania (-3,075).

Eye on the Week Ahead

There's very little in terms of market-moving economic data being released this week. The Federal Open Market Committee releases the minutes from its last meeting, which might provide some insight as to the direction the Committee may be headed with respect to interest rates. Also out this week is the January data on sales of existing homes. Sales declined 1.0% in December and 6.2% year over year.


Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers.
Securities offered through Lincoln Investment, Broker/Dealer, Member FINRA/SIPC.
www.lincolninvestment.com

Outlook Financial Group, LLC and the above firms are independent and non-affiliated.

The Lincoln Investment Companies do not provide tax, legal, or social security claiming advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Diversification or asset allocation do not guarantee a profit or protect against a loss. Calculators are provided only as general self-help planning tools. Results depend on many factors, including the assumptions you provide and may vary with each use and over time. We do not guarantee their accuracy, or applicability to your circumstances.

Prepared by Broadridge Advisor Solutions Copyright 2024.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).

News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.

Market Week: February 12, 2024

The Markets (as of market close February 9, 2024)

Stocks closed higher last week, with the S&P 500 and the Nasdaq reaching record highs. Investors were encouraged by generally favorable fourth-quarter corporate earnings data and a downwardly revised Consumer Price Index for December. Each of the benchmark indexes listed here gained ground, led by the Russell 2000 and the Nasdaq. Last week saw information technology, communication services, industrials, and consumer discretionary lead the market sectors, while utilities and consumer staples trended lower. Crude oil prices continued to rise last week amid ongoing Middle East tensions.

The week kicked off with stocks falling as bond yields advanced. The small caps of the Russell 2000 took the brunt of the downturn, giving back 1.3%, followed by the Dow (-0.7%), the Global Dow (-0.5%), the S&P 500 (-0.3%), and the Nasdaq (-0.2%). Yields on 10-year Treasuries gained 13.1 basis points to close at 4.16%. Crude oil prices gained 0.8%, settling at $72.82 per barrel. The dollar advanced 0.5%, while gold prices fell 0.6%.

Equities closed up last Tuesday following a selloff in the prior session. Materials and real estate were solid sectors, offsetting a decline by information technology. Among the benchmark indexes listed here, the Russell 2000 gained the most after adding 0.9%. The Global Dow rose 0.8%, the Dow advanced 0.4%, the S&P 500 climbed 0.2%, while the Nasdaq inched up 0.1%. Ten-year Treasury yields closed at 4.09% after falling 7.4 basis points. Crude oil prices rose roughly $0.70 to $73.48 per barrel. The dollar ticked lower, while gold prices rose 0.4%. With earnings season reaching the half-way mark, 75% of S&P 500 companies have reported actual earnings per share (EPS) above estimates. In aggregate, S&P 500 companies have exceeded estimates by 7.3%, leading to a net $16.0 billion increase in earnings for the fourth quarter since January 19.

Stocks climbed higher last Wednesday as investors chewed over another batch of corporate earnings. The Nasdaq gained 1.0% to lead the benchmark indexes listed here. The S&P 500 rose 0.8% to hit a new record high. The Dow added 0.4% and the Global Dow ticked up 0.2%. The small caps of the Russell 2000 dipped 0.2%. Yields on 10-year Treasuries inched up 2.0 basis points to 4.11%. Crude oil prices rose $0.76 to $74.07 per barrel. The dollar and gold prices declined.

Last Thursday saw the S&P 500 reach 5,000 for the first time in its history, only to close slightly below that mark. A strong performance from chip makers helped advance the Nasdaq by 0.2%. The Dow edged up 0.1%. The small caps of the Russell 2000 led the benchmarks, gaining 1.5%. Despite the gain, the Russell 2000 remains in bear territory (down by 20% from a prior peak in 2021). The Global Dow dipped 0.2%. Crude oil prices jumped $2.60 to $76.46 per barrel. Ten-year Treasury yields closed at 4.17% after gaining 6.0 basis points. The dollar ticked up 0.1%, while gold prices fell 0.1%.

Last Friday saw the S&P 500 (0.6%) top the 5,000 mark, while the Nasdaq (1.3%) closed at a record high. The Russell 2000 enjoyed a second solid day, adding 1.5%. The Global Dow was flat, while the Dow dipped 0.1%. Ten-year Treasury yields inched up 1.7 basis points to 4.18%. Crude oil prices increased $0.32 to $76.55 per barrel. The dollar and gold prices closed the session in the red.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • Business activity in the services sector expanded in January at the fastest pace since June 2023. New orders increased in both the domestic market and for exports. The increase in demand spurred more hirings by service firms. At the same time, inflationary pressures softened, with costs to service providers rising at the slowest pace since June 2020. The S&P Global US Services PMI Business Activity Index posted 52.5 in January, up from 51.4 in December. The latest reading marks the fourth straight month of expansion in the services sector.

  • The latest data from the Bureau of Economic Analysis shows the December trade deficit was $62.2 billion, up $0.3 billion, or 0.5%, from the November deficit. December exports were $258.2 billion, $3.9 billion, or 1.5%, more than November exports. December imports were $320.4 billion, $4.2 billion, or 1.3%, more than November imports. For 2023, the goods and services deficit was $773.4 billion, a decrease of $177.8 billion, or 18.7%, from 2022. This is the lowest annual trade deficit in three years. Exports increased $35.0 billion, or 1.2%. Imports decreased $142.7 billion, or 3.6%.

  • The national average retail price for regular gasoline was $3.136 per gallon on February 5, $0.041 per gallon higher than the prior week's price but $0.308 per gallon less than a year ago. Also, as of February 5, the East Coast price increased $0.034 to $3.117 per gallon; the Midwest price rose $0.039 to $2.911 per gallon; the Gulf Coast price increased $0.068 to $2.821 per gallon; the Rocky Mountain price advanced $0.014 to $2.746 per gallon; and the West Coast price increased $0.046 to $3.983 per gallon.

  • For the week ended February 3, there were 218,000 new claims for unemployment insurance, a decrease of 9,000 from the previous week's level, which was revised up by 3,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended January 27 was 1.2%, a decrease of 0.1 percentage point from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended January 27 was 1,871,000, a decrease of 23,000 from the previous week's level, which was revised down by 4,000. States and territories with the highest insured unemployment rates for the week ended January 20 were New Jersey (2.8%), Rhode Island (2.7%), Minnesota (2.6%), California (2.5%), Massachusetts (2.4%), Illinois (2.3%), Montana (2.3%), Alaska (2.2%), Oregon (2.1%), Pennsylvania (2.1%), and Washington (2.1%). The largest increases in initial claims for unemployment insurance for the week ended January 27 were in Oregon (+5,458), California (+5,015), New York (+4,133), Georgia (+1,032), and Texas (+900), while the largest decreases were in Illinois (-2,278), Missouri (-1,588), Massachusetts (-898), Montana (-717), and New Jersey (-507).

Eye on the Week Ahead

January inflation data is available this week with the release of the Consumer Price Index, the Producer Price Index, and the report on import and export prices. Consumer prices rose marginally in December, with the CPI increasing 0.3% for the month and 3.4% for the 12 months ended in December. Producer prices, on the other hand, ticked down 0.1% in December and were up only 1.0% for the year.


Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers.
Securities offered through Lincoln Investment, Broker/Dealer, Member FINRA/SIPC.
www.lincolninvestment.com

Outlook Financial Group, LLC and the above firms are independent and non-affiliated.

The Lincoln Investment Companies do not provide tax, legal, or social security claiming advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Diversification or asset allocation do not guarantee a profit or protect against a loss. Calculators are provided only as general self-help planning tools. Results depend on many factors, including the assumptions you provide and may vary with each use and over time. We do not guarantee their accuracy, or applicability to your circumstances.

Prepared by Broadridge Advisor Solutions Copyright 2024.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).

News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.