In this week’s recap: Fed’s reassurance boosts stocks.
WEEKLY MARKET UPDATE
Presented by Great Lakes Wealth, March 6, 2023
THE WEEK ON WALL STREET
A late-week surge, triggered by reassuring Fed-speak, propelled stocks higher last week.
The Dow Jones Industrial Average gained 1.75%, while the Standard & Poor’s 500 advanced 1.90%. The Nasdaq Composite index picked up 2.58% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.81%.1,2,3
STOCKS RESUME CLIMB
After rebounding to start the week, stocks weakened following higher inflation numbers out of Europe and higher-than-expected manufacturing activity.
Stocks continued their decline into early Thursday following a report of higher labor costs and low initial jobless claims. But stocks staged an afternoon relief rally on Thursday following comments by Atlanta Fed President Raphael Bostic that he was “still very firmly” supportive of increasing rates in quarter-point increments. The climb in stocks was remarkable, given that yields on 10-year Treasuries reached their highest level since November. Undeterred by a strong services data report, the upside momentum continued into the final trading day and added to the week’s gains.4
DISCONCERTING ECONOMIC DATA
It was a relatively quiet week for economic news, but several new economic data reports gave insights into overall activity. U.S. manufacturing activity contracted in February–the fourth consecutive month it has done so. While this may eventually justify a reason for moderating future rate hikes, the activity exceeded analysts’ expectations. An accompanying survey of manufacturers pointed to improving demand and potentially accelerating price pressures.
Meanwhile, China reported an outsized jump in manufacturing activity, which may help relieve remaining supply chain kinks. But the report may also fuel commodity price increases and influence global inflation. Inflation remained a persistent issue in Europe, as February’s Eurozone inflation read was hotter than anticipated.
T I P O F T H E W E E K
Take a tip from the millionaire next door: buy a terrific low-maintenance car and drive it for several years or more. Your ride may not be flashy, but the choice may prove thrifty.
THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: Factory Orders.
Wednesday: Automated Data Processing (ADP) Employment Report. Job Openings and Labor Turnover Survey (JOLTS).
Thursday: Jobless Claims.
Friday: Employment Situation.
Source: Econoday, March 3, 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.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: Dick’s Sporting Goods, Inc. (DKS), CrowdStrike (CRWD).
Wednesday: MongoDB, Inc. (MDB).
Thursday: Ulta Beauty, Inc. (ULTA), DocuSign (DOCU).
Source: Zacks, March 3, 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.
Q U O T E O F T H E W E E K
“Your time is limited, so don't waste it living someone else's life.”
STEVE JOBS
T H E W E E K L Y R I D D L E
We know that a seahorse isn’t a horse, and we know that a silverfish isn’t a fish. For that matter, a snakehead isn’t a snake – but what is it?
LAST WEEK’S RIDDLE: About 90% of this country’s land area is made up of arid tan desert, yet its flag was once solid green (until 2011) – in fact, at one time it was the only nation in the world with a flag containing just one color. What nation is this?
ANSWER: Libya.
CITATIONS:
- The Wall Street Journal, March 3, 2023
- The Wall Street Journal, March 3, 2023
- The Wall Street Journal, March 3, 2023
- The Wall Street Journal, March 2, 2023