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Financial Market Update – Week of 02/12

February 12, 2024

The broader major U.S. stock indexes kept chugging along last week, with the S&P 500 making fresh highs and closing above 5,000 for the first time in history. Last week’s gains for the S&P 500 marked its 14th weekly gain out of the last 15 weeks, a feat last seen over 50 years ago!

Overall, for last week, the S&P 500 climbed by 1.37%, the Nasdaq 100 rose by 1.81%, and the Dow Jones Industrial Average increased by a marginal 0.04%.

S&P 500 Closes Above 5,000

It’s all over the news, and markets are generally obsessed with round numbers. Some folks put on their party hats and get excited, but for the disciplined long-term investor, it really is just a number.

Yes, without a doubt, the major U.S. stock market averages have been in a tear as of late. In fact, the S&P 500 rose from the October 2023 lows just above 4,100 to north of 5,000 in just 15 weeks.

But there is no need for excitement when it comes to planning your financial future. Remaining steady and level-headed during both bull and bear markets is a critical component of long-term success.

To put the last 1,000 S&P 500 points into perspective, it was April of 2021 when the S&P 500 crossed the 4,000 level for the first time.

Tech in Growth Mode & To-Date Q4 S&P 500 Earnings 

Earnings watchers have been pleased by several results from tech companies lately, indicating that the tech sector is back in growth mode.

Artificial intelligence (AI) continues to be a key driver in quarterly technology company conference calls, and the AI theme isn’t going away anytime soon.

For Q4 2023, with 67% of S&P 500 companies across all sectors reporting actual results, the year-over-year earnings growth rate is 2.9%.

If 2.9% ends up being the actual growth rate for the quarter, it will be the second consecutive quarter that the S&P 500 has reported earnings growth, according to data from FactSet.

Treasury Yields Rise

While markets were obsessed with the S&P 500 last week, Treasury yields quietly rose. Ten-year note yields rose by about 15.6 basis points, settling the week near 4.188%, up from their previous weekly close near 4.032%.

So, the ability of the major U.S. stock market indexes to rise with Treasury yields rising was alive and well last week, much to the displeasure of prospective mortgage borrowers, with the average 30-year mortgage rate climbing back above 7% last week before dipping slightly.

Inflation Data This Week 

Consumer inflation data is on tap this week,  and many investors are eagerly awaiting the release of Consumer Price Index (CPI) data on Tuesday and Producer Price Index (PPI) data on Friday.

This is an important release, and anything is possible, especially after last month’s mixed inflation data. Revisions to December data released last week showed that U.S. monthly consumer prices rose less than initially thought, however.

As I mentioned earlier, it’s important to stay calm and level-headed when investing for the long term. No one can predict with a high level of certainty whether inflation will maintain its current pace of decline.


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