US Equity Markets rallied last week, as cooler than expected inflation data raised hopes that the Fed may be more accommodating with interest rates. The S&P 500 rose 2.9% for the week and is now up 2.0% for the year. The Nasdaq increased 2.5% for the week and has gained 1.7% for the year, while the Russell 2000 (small cap stocks) surged 4.0% for the week and is now up 2.1% for year.
Global Equity Markets rose last week, helped by positive inflation data out of Europe and an announced agreement between Israel and Hamas. Developed Markets were up 1.9% for the week and are now up 1.2% for the year. Emerging Markets increased 1.2% for the week but remain down 0.5% for the year.
Inflation Data drive interest rates lower. The Consumer Price Index (CPI) for December rose 2.9% from a year ago, in line with expectations but up from 2.7% in November. More notably, Core CPI, which excludes food and energy prices, was up 3.2% from last year, better than expected and down from 3.3% in November. Producer Prices also came in below expectations for December. As a result, the yield on the 10-Year US Treasury dropped to 4.61% vs. 4.77% the prior week.
Of Interest to Us
Ironically, Energy was the best performing equity sector by far under the Biden Administration. As President Biden's term comes to an end, the best performing equity sector since his election in November 2020 was Energy (up 240%) followed by Technology (up 120%) and Financials (up 117%). The worst performing sectors were Real Estate (up 34%), Healthcare (up 38%), and Consumer Staples (up 40%).
Market Data
for the week ending 1/17/2025
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