Market Minute – Week of February 20

Welcome to the “Market Minute” series! In this weekly blog post, Dave provides you with all the latest updates on market and economic trends that you need to stay on top of.

Fickle Market

The markets can be fickle, and we saw that on Tuesday last week when a slightly – higher than expected inflation reading for January caused the markets to tumble. Markets never move up in a straight line, and the reaction to the news serves as a reminder that when the market rises quickly, the news needs to reflect the expectations with near perfection to prevent a reversal.

What goes up: Last week we talked (again) about how the tech sector was driving most of the market’s growth as it hit new highs. This week saw the S&P500 down -0.35% while the tech sector lost -2.4%. 

JP Morgan notes in their Thought of the Week that, despite a higher overall inflation reading for January, the details show that the prices for core goods still fell in January. They also note that real wages, after inflation, have continued to grow, meaning the average worker has more spending power. 

The Economy

Other January economic data showed that the economy slowed a bit in January, with retail sales, industrial production, and housing starts all coming in slightly worse than consensus expectations. The Wall Street Journal comments that there were still encouraging signs of economic strength in the details (for example, spending on food services actually rose) that indicate this is more likely a pause than a sign that the economy is in trouble.

REMEMBER: Always take a long-term view of your portfolio. We like to help you keep tabs on the news and how it relates to your portfolio, but a week, a month, and multiple years are too short a timeframe to evaluate market investments.

Upcoming Week

• • Earnings from AI hardware maker NVIDIA