Wall Street continued its February rally into March as stocks closed last week notably higher except for the Dow, which ticked lower. Traders’ enthusiasm about tech shares, particularly AI stocks, helped drive the upturn. Inflation data also was positive. While consumer prices ticked up in January, the 12-month rate declined, lessening concerns that the Federal Reserve would delay interest rate cuts beyond this year. Information technology led the market sectors, with real estate and consumer discretionary also moving higher. The yield on 10-year Treasuries fell as bond prices advanced. Crude oil prices ended the week higher. The dollar slipped lower, while an end-of-week rally helped drive gold prices up.
Last Week’s Economic News
- Gross domestic product (GDP) grew in the fourth quarter of 2023, according to the most recent estimate.
- Personal income rose in January, while consumer spending inched up. The personal consumption expenditures price index, a noted measure of inflation, rose in January after ticking up in December. However, the 12-month rate rose 2.4%, closer to the Federal Reserve’s goal of 2.0% inflation.
- Sales of new single-family homes rose in January, a pace that was slightly below expectations.
- New orders for manufactured durable goods decreased in January, marking the third monthly decline out of the last four months.
- The international trade in goods deficit was $90.2 billion in January, up $2.3 billion, or 2.6%, from $87.9 billion in December.
- Manufacturing accelerated in February for the second straight month, according to the S&P survey of purchasing managers.
- The national average retail price for regular gasoline was $3.249 per gallon on February 26.
- For the week ended February 24, there were 215,000 new claims for unemployment insurance, an increase of 13,000 from the previous week’s level.
Eye on the Week Ahead
The employment sector is front and center this week with the releases of the latest Job Openings and Labor Turnover Survey and the employment situation. The numbers of job openings, hires and separations have been relatively consistent over the past few months and are expected to stay in line with recent trends. On the other hand, employment rose by an unexpectedly high 353,000 in January, which, when coupled with upward revisions for November and December, shows the employment sector has remained strong.
Have a nice week!
Sincerely,
Robert G. Carpenter