Stocks endured a volatile week, with defensive positioning dominating stock traders’ behavior. The S&P 500 was down, and overall the Global Dow was the only major index to finish higher. Ongoing concerns about AI disruption spread to additional industries, prompting speculators to rotate out of financials, communication services, and technology and into defensive sectors such as utilities, materials, and real estate, which led weekly gains. Safe-haven buying pushed 10-year Treasury yields down to their lowest level since late November. Gold prices climbed, while crude oil edged lower.
Last Week’s Economic News
-
Employment rose by 130,000 in January, with gains in health care, social assistance, and construction; unemployment edged down to 4.3%.
-
Wage growth remained strong, with average hourly earnings up 0.4% in January and 3.7% year-over-year.
-
Inflation cooled further, as the Consumer Price Index rose 0.2% in January and 2.4% over the past year, down from 2.7% previously.
-
Core inflation increased slightly in January, while shelter price growth moderated and energy prices declined.
-
Retail sales were flat month-over-month, and up moderately from a year earlier.
-
Existing home sales fell in January, though median prices remained above year-ago levels.
-
The federal deficit narrowed in January, coming in at $95 billion and running below last year’s pace on a fiscal year-to-date basis.
-
Weekly jobless claims declined modestly, though continuing claims increased slightly.
-
Gasoline prices rose slightly, but remain well below year-ago levels.
Eye on the Week Ahead
Markets will focus on the first estimate of fourth-quarter GDP, with traders looking to see whether the strong 4.4% annualized growth rate in the third quarter carried into year-end. Economic data release timing remains somewhat fluid as agencies continue working through reporting delays.
Have a nice week!
Sincerely,
Robert G. Carpenter