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Weekly Market Insights: Record High Hits The S&P

Weekly Market Insights: Record High Hits The S&P

February 12, 2024

The stock market had a great week with solid gains, ending on a positive note due to strong corporate reports and favorable inflation news. As a result, the S&P 500 Index set a new record high at the end of the week.

S&P Tops 5,000

Last week, the stock market initially faced a decline due to comments made by Fed Chair Powell over the weekend, indicating that the Federal Reserve had no plans to initiate interest rate cuts in the near future. This led to an increase in the yield on the two-year U.S. Treasury note, which is highly influenced by monetary policy, reaching its highest level in two months.

However, by the end of trading on Monday, the stock market had regained a significant portion of its losses due to positive corporate earnings reports. This trend continued throughout the week, leading to an overall market rally. By Friday, 67% of the companies listed in the S&P 500 had released their Q4 results, and an impressive 77% of those companies exceeded earnings expectations.

Investors were encouraged on Friday after a report indicated that December's inflation was lower than expected. This positive news led to an increase in buying activity, resulting in the S&P 500 surpassing 5,000 for the first time.

Source: YCharts.com, February 10, 2024. Weekly performance is measured from Monday, February 5, to Friday, February 9.
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.

Economic Strength

The strength of the United States economy is gaining attention. A recent analysis by The Wall Street Journal has suggested that the technology sector plays a significant role in driving the economy's productivity. However, there are concerns that rising oil prices and surcharges imposed by shipping companies to manage conflict may dampen investor enthusiasm and contribute to global inflation this year.

This Week: Key Economic Data

Tuesday: Consumer Price Index (CPI).

Wednesday: EIA Petroleum Report.

Thursday: Industrial Production. Retail Sales. Jobless Claims. 

Friday: Housing Starts. Producer Price Index (PPI). Consumer Sentiment. 

Source: Investors Business Daily - Econoday economic calendar; February 8, 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

Monday: Arista Networks, Inc. (ANET), Waste Management, Inc. (WM)

Tuesday: The CocaCola Company (KO), Shopify Inc. (SHOP), AirBnB, Inc. (ABNB), Moody’s Corporation (MCO)

Wednesday: Cisco Systems, Inc. (CSCO), Sony Corporation (SONY), Kraft Heinz Company (KHC)

Thursday: Applied Materials, Inc. (AMAT), Deere & Company (DE)

Source: Zacks, February 8, 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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Food For Thought

"A real friend is one who walks in when the rest of the world walks out."

– Walter Winchell

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Tax Tip 

Are You Prepared for a Natural Disaster? 

Natural disasters, such as hurricanes, earthquakes, or fires, can occur unexpectedly, so it is crucial to prepare before disaster strikes. Here are a few tips that can help you be ready in case of an emergency:

• Update your family's emergency plans: Your emergency plans should include knowing where to go, where you keep all necessary documents and possessions, and what you need to be prepared for. Make sure to review and update the emergency plans for your home or business frequently because things can change.

• Create digital copies of important documents: Most financial organizations, such as banks and insurance companies, provide digital copies of bank statements, tax returns, and insurance policies. Keeping all these digital copies saved and organized is an excellent practice to get into. If you only have paper copies of important documents, scan them and save them securely to access them in an emergency.

• Document valuables: Documenting valuables makes it easier to claim insurance and tax benefits after a natural disaster. A disaster loss workbook will help you compile a list of belongings and photographs that can make this process even more accessible for both the IRS and your insurance provider.

These tips may help you have everything you need ready in the case of a natural disaster or other emergency.

*This tax tip is for informational purposes only and is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals for more specific information.

Tip adapted from IRS.gov6

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Healthy Living Tip 

Picking Up a Creative Hobby Is About More Than Passing the Time  

Engaging in creative hobbies such as writing, knitting, or sewing is not just a way to kill time. These activities can improve your overall well-being, enhance your productivity, and make you happier. Experts advise individuals to choose a low-risk and low-pressure activity that they have a passion for when selecting a hobby or side project. The main difference between a creative hobby and a side project is that the former is an ongoing activity without a specific end goal, while the latter has a clear goal to achieve. For instance, you could consider writing as your creative hobby, and writing a book as your side project. Committing to a project or hobby can have a significant psychological benefit and increase your work productivity.


Tip adapted from Fast Company7

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Riddle Of The Week 

If a single-engine airplane taxied not onto a runway but onto an enormous conveyor belt whose speed precisely equaled that of the plane in the opposite direction, could the plane still manage to take off?

  

Last week’s riddle: Two men played five games of chess in the park. They both won the same number of games, yet none of the games they played ended in a draw. So how could this be? Answer: They were not playing each other.

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Photo Of The Week

A view of Mont-Saint-Michel at sunrise

 

Footnotes and Sources


1. The Wall Street Journal,February 4, 2024

2. FactSet.com, February 9, 2024

3. CNBC.com, February 9, 2024

4. WSJ.com, February 8, 2024

5. CNBC, February 9, 2024

6. IRS.gov, March 8, 2023

7. Fastcompany.com, October 9, 2023 

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 the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, 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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