Weekly market wrap

Key Takeaways:
After a year (2022) in which nothing seemed to go investors' way, 2023 has, so far, been the polar opposite. Stocks are up handsomely while interest rates are down. Last week brought a heavy dose of fresh information on what we'd consider to be the two critical drivers for the market this year: the Fed and the labor market. The outcome was another up week for the market – its fourth in the first five weeks of 2023.
Image Description: This chart shows the comparison between stocks and rates in 2022 and 2023.
Source: Bloomberg, Past performance is not a guarantee of future returns. Stocks represented by the S&P 500 index. The S&P 500 index is unmanaged and cannot be invested in directly. Rates represented by the 10-year treasury yields.Image Description: This chart shows the comparison between stocks and rates in 2022 and 2023.
Source: Bloomberg, Past performance is not a guarantee of future returns. Stocks represented by the S&P 500 index. The S&P 500 index is unmanaged and cannot be invested in directly. Rates represented by the 10-year treasury yields.While this recent rally is both welcome and reasonable, we don't think it should be viewed as confirmation that the coast is clear. Given what we learned last week, here are our latest thoughts on several popular takes that prevailed heading into this year:
Image Description: This chart shows the loosening financial conditions in recent months even as rates have risen.
Source: BloombergImage Description: This chart shows the loosening financial conditions in recent months even as rates have risen.
Source: BloombergImage Description: This chart highlights forward looking inflation indicators pointing to continued softening in inflationary pressures.
Source: BloombergImage Description: This chart highlights forward looking inflation indicators pointing to continued softening in inflationary pressures.
Source: BloombergImage Description: This chart shows the historically low unemployment rate.
Source: FREDImage Description: This chart shows the historically low unemployment rate.
Source: FREDImage Description: This chart shows that the VIX index has moved to lower than average territory, which could signal volatility ahead.
Source: Bloomberg, the VIX is unmanaged and cannot be invested in directly.Image Description: This chart shows that the VIX index has moved to lower than average territory, which could signal volatility ahead.
Source: Bloomberg, the VIX is unmanaged and cannot be invested in directly.Craig Fehr, CFA
Investment Strategist
Source: 1. Bureau of Labor Statistics. 2. Bloomberg, CBOE Volatility Index (VIX). 3. Bloomberg, total return of the S&P 500 Index, MSCI EAFE Index and Bloomberg U.S. Aggregate Bond index. 4. Bloomberg
INDEX | CLOSE | WEEK | YTD |
---|---|---|---|
Dow Jones Industrial Average | 33,926 | -0.2% | 2.3% |
S&P 500 Index | 4,136 | 1.6% | 7.7% |
NASDAQ | 12,007 | 3.3% | 14.7% |
MSCI EAFE * | 2,119.00 | 0.5% | 9.0% |
10-yr Treasury Yield | 3.52% | 0.0% | -0.4% |
Oil ($/bbl) | $73.23 | -8.1% | -8.8% |
Bonds | $99.82 | -0.3% | 4.2% |
Source: Factset. 02/03/2023. Bonds represented by the iShares Core U.S. Aggregate Bond ETF. Past performance does not guarantee future results. * Source: Morningstar, 02/06/2023.
Important economic data coming out this week include wholesale inventories and consumer credit.
Review last week's weekly market update.
Craig Fehr is a principal and the leader of investment strategy for Edward Jones. Craig is responsible for analyzing and interpreting economic trends and market conditions, along with constructing investment strategies and asset allocation guidance designed to help investors reach their financial goals.
He has been featured in Barron’s, The Wall Street Journal, the Financial Times, SmartMoney magazine, MarketWatch, the Financial Post, Yahoo! Finance, Bloomberg News, Reuters, CNBC and Investment Executive TV.
Craig holds a master's degree in finance from Harvard University, an MBA with an emphasis in economics from Saint Louis University and a graduate certificate in economics from Harvard.
The Weekly Market Update is published every Friday, after market close.
This is for informational purposes only and should not be interpreted as specific investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice.
Investors should understand the risks involved in owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates and investors can lose some or all of their principal.
Past performance does not guarantee future results.
Market indexes are unmanaged and cannot be invested into directly and are not meant to depict an actual investment.
Diversification does not guarantee a profit or protect against loss in declining markets.
Systematic investing does not guarantee a profit or protect against loss. Investors should consider their willingness to keep investing when share prices are declining.
Dividends may be increased, decreased or eliminated at any time without notice.
Special risks are inherent in international investing, including those related to currency fluctuations and foreign political and economic events.