US Equity Markets extended their gains last week despite strong US economic data and comments from Fed Chairman Powell that lessened the likelihood of rate cuts in March. The S&P 500 rose 1.4% for the week and is now up 4.0% for the year. The Equal Weight S&P 500 continues to underperform, up 0.4% for the week and only up 0.2% for the year. The Nasdaq increased 1.1% for the week to bring its gains for the year to 4.1%, while the Russell 2000 (small cap stocks) fell 0.8% for the week on renewed concerns among small banks. The Russell 2000 is now down 3.2% for the year.
Global Equity Markets were mixed last week on slightly hotter-than-expected inflation data out of Europe. Developed Markets were flat for the week with slight declines in Europe offset by gains in Japan. Developed Markets remain down 0.7% for the year. Emerging Markets rose 0.3% for the week and are now down 3.5% for the year.
US Interest Rates declined last week despite strong economic data and Fed comments saying rate cuts may be delayed. Payroll gains for January surged 353K, significantly more than expected and above the upwardly revised gains in December of 333K. The Unemployment Rate held steady at 3.7%. Average Hourly Wages for January increased 4.5% from a year ago, also higher than expected and above the 4.3% increase in December. Despite the higher wage inflation and Payroll gains, the yield on the US 10-Year Treasury fell to 4.03% from 4.15% the prior week.
Of Interest to Us
The so-called January Barometer suggests stocks will be higher in 2024. The January Barometer posits that if the S&P 500 is up for the month of January, then the full year will also be higher. Likewise, if the S&P 500 is down in January, then returns will be down for the full. According to the Stock Trader's Almanac, this barometer has an 84% accuracy rate since 1950 with only 12 major errors over that time. The S&P 500 was up 1.6% in January, so perhaps the markets are poised for a good year.
Market Data
for the week ending 2/2/2024
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