Stocks drifted lower as a week of mixed earnings reports and resurgent worries over Fed monetary policy dragged on investor sentiment. The markets recorded their worst week of 2023, last week. The Wall Street Journal reported this morning that investors are fleeing the US equity market despite the rally over the last month and a half. Investors don't believe the Fed has inflation tamed. If traffic this morning on my way to our Red Bank office is any indication, the job market remains strong, and people are back to the office.
The Dow Jones Industrial Average slipped 0.17%, while the Standard & Poor’s 500 declined 1.11%. The Nasdaq Composite index lost 2.41%. The MSCI EAFE index, which tracks developed overseas stock markets, dipped 0.30%.1,2,3
Stocks struggled last week, weighed down by rising bond yields, a firming U.S. dollar, geopolitical tensions, and generally unimpressive corporate earnings reports. Perhaps the most consequential overhang was the potential direction of monetary policy.
Initially, traders were relieved by comments made by Fed Chair Jerome Powell earlier in the week that he had not struck a more aggressive tone following the strong employment report released after the Federal Open Market Committee (FOMC) meeting. The relief was short-lived, however, as anxieties over future monetary policy resurfaced, exacerbated by comments by one Fed governor who suggested restrictive monetary policy would be necessary for a few years to tamp down inflation.
Powell Repeats Himself
Investors were particularly eager on Tuesday to hear Powell’s first comments following the strong employment report the previous Friday. The concern was that the surprise job number would change Powell’s outlook coming out of the last FOMC meeting.
Powell instead repeated his post-FOMC meeting remarks, which were that a disinflationary trend was underway, and there remained a distance to travel before the measures taken tamed inflation. The Fed would be data-dependent in making future rate decisions. Powell also pointed out that the robust job growth showed why it might take so long to reduce inflation to the Fed’s target level.4
This Week: Key Economic Data
Tuesday: Consumer Price Index (CPI).
Wednesday: Retail Sales.
Thursday: Jobless Claims. Producer Price Index (PPI). Housing Starts.
Friday: Index of Leading Economic Indicators.
Source: Econoday, February 10, 2023
This Week: Companies Reporting Earnings
Tuesday: The CocaCola Company (KO), Zoetis, Inc. (ZTS), Marriott International, Inc. (MAR).
Wednesday: Cisco Systems, Inc. (CSCO), Shopify, Inc. (SHOP), Albemarle Corporation (ALB).
Thursday: Applied Materials, Inc. (AMAT), The Southern Company (SO).
Friday: Deere & Company (DE).
Source: Zacks, February 10, 2023
"Thinking about what you can't control only wastes energy and creates its own enemy."
– Sandy Fries
The Two Types of IRS Volunteer Programs
Every year, IRS-certified volunteers help people file their tax returns accurately. This volunteer opportunity is perfect for people who want to learn more about tax preparation, need to earn continuing education credits, or want to give back to their community.
The IRS offers the Volunteer Income Tax Assistance program (VITA) and the Tax Counseling for the Elderly program (TCE). VITA offers free help to people who generally earn $60,000 or less, people with disabilities, and limited English-speaking taxpayers. TCE is mainly for people aged 60 or older. Although the program focuses on tax issues unique to seniors, most taxpayers can get free assistance.
*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov5
4 Potential Benefits of Aloe Vera
Aloe vera is quite a robust plant! Not only is it safe to eat and used in many cosmetic products, but it also has many benefits that stem (pun intended) outside its typical uses.
Here are four potential benefits of Aloe vera:
In addition to the above benefits, many people use Aloe vera to soothe sunburns, dry skin, and cuts.
Tip adapted from Every Day Health6
They have no bodies, but you could say they have tails and heads. What are they?
Last week’s riddle: What is the beginning of sorrow and the end of sickness? Something you cannot express happiness without? Something that is always in risk, but never in danger? Answer: The letter "s."
Hana HIghway, Maui, Hawaii
Footnotes and Sources
2. The Wall Street Journal, February 10, 2023
3. The Wall Street Journal, February 10, 2023
4. The Wall Street Journal, February 7, 2023
5. IRS.gov, October 20, 2022
6. EveryDayHealth.com, July 8, 2022
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Weekly Market Insights: Mixed Feelings and Mixed Earnings
February 13, 2023