After a hot start to the year, a week of mixed results added some calm to the market. Despite constant news of a pending recession, corporate earnings were strong and there is hope that interest rates will stop rising and come down soon. No predictions yet on the price of eggs! :)
The Dow Jones Industrial Average edged lower, slipping -0.15%. The Standard & Poor’s 500 rose 1.62% while the Nasdaq Composite index led, picking up 3.31%. The MSCI EAFE index, which tracks developed overseas stock markets, increased by 1.16%.
When I woke up this morning to prepare for the day, the top two market news articles were: "Goldman Sachs expects stocks to fall 25%", and "Expert predicts stocks could jump 21% after strongest bull signal since 2020". Neither "expert" put a timeline on their prediction, so I suppose given enough time they will eventually both be correct. For the rest of us without a crystal ball, we shall continue to work the plan.
Strong earnings reports and encouraging inflation data lifted stocks ahead of the Federal Open Market Committee’s (FOMC) decision on Wednesday to hike interest rates by 25 basis points. Markets rallied following the announcement, relieved that the increase was in line with expectations and buoyed by post-meeting comments in which Fed Chair Jerome Powell acknowledged the disinflationary forces in place.
Fresh earnings reports fueled further gains, with positive earnings surprises from several big-name technology companies that benefited the larger universe of Nasdaq-listed high-growth companies. Disappointing earnings from three mega-cap tech companies and a strong employment report triggered a Friday pull-back, paring the week’s gains.
Another Rate Hike
The Federal Reserve raised interest rates by 0.25%, signaling to the financial markets that it would likely hike rates by another 25 basis points at its next meeting in late March. Fed officials said the slowdown in rate hikes might provide time to assess the impact of the accumulated rate hikes. The Fed retained language in its post-meeting statement that future rate hike plans were unchanged to discourage investors’ hopes of an imminent pause in the rate-hike cycle.4
In his post-meeting press conference, Fed Chair Powell reiterated the Fed’s commitment not to declare victory on inflation prematurely but acknowledged that a disinflationary trend was underway.5
This Week: Key Economic Data
Thursday: Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, February 3, 2023
This Week: Companies Reporting Earnings
Tuesday: Fortinet, Inc. (FTNT), Chipotle Mexican Grill, Inc. (CMG).
Wednesday: CVS Health Corporation (CVS), Prudential Financial, Inc. (PRU), The Walt Disney Company (DIS).
Thursday: AbbVie, Inc. (ABBV), PayPal Holdings, Inc. (PYPL), PepsiCo, Inc. (PEP), Kellogg Company (K), Expedia Group, Inc. (EXPE), O’Reilly Automotive, Inc. (ORLY).
Source: Zacks, February 3, 2023
"A man's legacy is defined by time."
– John Cena
Don’t Miss Out on the 2021 Child Tax Credit
Did you know that not just biological parents are eligible for the 2021 child tax credit? Grandparents, foster parents, or people caring for siblings or other relatives should also check their eligibility. If you claim at least one child as your dependent, you may be eligible to benefit from the child tax credit.
In 2021, the IRS expanded the child tax credit. This expansion increased the amount of money families can receive per child and expanded who can receive the payments. The credit increased from $2,000 to $3,600 per child for children under the age of six and $2,000 to $3,000 for children over the age of 6. It also raised the age limit from 16 to 17 years old.
* 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.gov6
What is Clean Beauty?
What you put on your body is just as important as what you put in your body! This is why more people are choosing clean skincare and beauty products. Clean ingredients are better for the environment and often more gentle on your skin.
Clean beauty products don’t contain synthetic chemicals and ingredients that could harm your body or irritate your skin. Some of these synthetic ingredients include:
Tip adapted from FOREO7
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?
Last week’s riddle: Karen is twice her brother’s age and half her father’s age. In 22 years, her brother will be half the father’s age. How old is Karen now? Answer: Karen is 22 years old.
Haleakala National Park, Maui, Hawaii
Footnotes and Sources
2. The Wall Street Journal, February 3, 2023
3. The Wall Street Journal, February 3, 2023
4. The Wall Street Journal, February 1, 2023
5. CNBC, February 1, 2023
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Weekly Market Insights: Inflation Down, Eggs Up
February 06, 2023