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January Retail Sales report reflected a monthly increase of 3%

February 21, 2023

The Major Markets closed the week mixed with only the Nasdaq closing higher. The S&P 500 opened initially higher Monday as the market was poised to stage a comeback after the prior week’s losses. Yet Monday’s gains didn’t mark a trend for the week but rather more of a ceiling. Tuesday experienced a slight decline after trading higher shortly after the open only to break back below Monday’s open and end virtually flat. The day was marked with the release of the Consumer Price Index Results for January. The 6.4% year-over-year headline was cooler than December but hotter than the forecast of 6.2%. This was still an improvement in the inflation rate as it marked the lowest headline reading since October of 2021. Ahead of Wednesday’s open, the January Retail Sales report reflected a monthly increase of 3%, significantly higher than the 1.9% expected. Investors wrestled with this information, concerned about what these back-to-back inflation-related reports might mean for the Fed’s plan with Interest rates. Wednesday opened lower but managed to hold the highest close for the week. Thursday’s Producer Price Index report and Weekly Initial Jobless Claims report still showed a market that was expanding while the drop in the Philadelphia Fed Manufacturing Survey saw a significant fall. Furthermore, the reading of -24.3 stood as the lowest reading since the Covid induced drop in 2020. This gave concerns about the prospect of stagflation. Treasuries responded with the yield curve rising higher overall with additional steepening at the shorter durations. Contact us today to learn more about how we can help you