Home|Who We Are|Our Services|Resources|News Center|Contact Us|Client Access
More Articles  Printer Friendly Version


Softening Economic Data, Inflation Fears Dampen Stock Rally

5220 2

Consumer prices rose 3.1% in January, higher than economist forecasts, housing starts slowed sharply, and retail sales slowed, according to government data releases this past week. The disappointing economic news only slightly dampened enthusiasm for stocks.

The Consumer Price Index, a composite of a basket of monthly household expenses on food, energy, autos, housing, medical and other costs, rose 3.1% over the 12 months through January. This was higher than the 2.9% rise expected by economists. The Tuesday, February 13, release caused a sharp one-day decline in the stock market.

5220 3

Thursday’s release of the advanced estimates of U.S. retail and food services sales for January 2024, softened by 0.8% from December 2023, and 0.5% lower than the same period a year ago. In addition, housing starts in January came in at a seasonally adjusted annual rate of 1,331,000, which is 14.8% below the January 2023 rate of 1,340,000 and 10.2% below the revised December estimate of 1,562,000. Single‐family housing starts in January were at a rate of 1,004,000, a 4.7% decline from the revised December figure of 1,054,000.

Despite Tuesday’s higher than expected CPI release, the slowing economic data on retail sales and housing is in line with expectations following the 12 interest rate increases by the Federal Reserve between March 2022 and July 2023. So the stock market fell slightly this past week because the data indicated the Fed may need to keep rates higher for longer.

5220 4

The Standard & Poor’s 500 stock index closed Friday at 5005.57, down -0.48% from Thursday, and -0.42% lower than a week ago. The index is up +123.72% from the March 23, 2020 bear market low. The S&P 500 broke a new record high closing price on Thursday and has repeatedly broken new record highs since early January.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.

Email this article to a friend

Stocks Closed At A Record High
Federal Reserve Projects Strong Growth
The Best People Were Wrong
This Week’s Investment News In Six Charts
U.S. Investor Picture Of The Week
The Conference Board Backs Off Its Recession Forecast
S&P 500 Closes Above 5000 For The First Time Ever
Why America Is The World’s Economic Leader
Investment News For The Week Ended Friday, January 26
Why Stocks Broke The All-Time Record High
A Strategic Update, With Stocks Near All-Time High And Crises Unfolding
2024 Begins With Positive Economic News
How 2023 Will Be Remembered In Financial History
A Good Week For The Economy And Investors
Earnings Estimates Imply A Bullish Path For Stocks

This article was written by a professional financial journalist for Responsive Financial Group, Inc and is not intended as legal or investment advice.

©2024 Advisor Products Inc. All Rights Reserved.
© 2024 Responsive Financial Group, Inc | 204 W Wing St, Arlington Heights, IL 60005 | All rights reserved
P: 847-670-8000 | F: 847-590-9806 ben@rfgweb.com |
Disclosure | Contact Us
Responsive Financial Group, Inc. is a fee-only registered investment advisory firm in the State of Illinois. Information on this site is compiled from multiple locations and is believed to be accurate. Incorrect information may come from these outside sources. Should you notice anything please notify us immediately. Thank you!