Markets Marching Higher

The Dow Jones Industrial Average, the NASDAQ, and the S&P 500 all reached record highs in February with the S&P 500 reaching a new milestone, crossing the 5000 level for the first time. Joining the move higher, the European Stoxx 600 also reached a record high, and even Japan’s Nikkei 225 joined in surpassing the 39000 level for a new record high. For the Nikkei 225, this is the first record high since 1989.
Core inflation has gradually decelerated over the last 10 months, down to 3.86% in January.
Treasury yields rose across the board even as equities rallied. Intermediate duration instruments posted the largest increases; the 2-year, 3-year, and 5-year all increased by 35 bps or more.
January’s unemployment rate stayed unchanged at 3.7%, as did the labor force participation rate at 62.5%, while Job openings hit their lowest level since March 2021 in January, indicating further signs of rebalancing in the labor market.

Equities rallied across the board as the NASDAQ led the way with a 6.2% gain. Both the Russell 2000 and Russell 1000 posted gains of around 5.5%, and the S&P 500 advanced 5.3%. The Dow Jones Industrial Average was the relative laggard but still rose 2.5%.

All eleven sectors advanced higher in February. Consumer Discretionary led the way with a 7.9% gain, followed by Industrials at 7.2% and Materials, which charged 6.5% higher.

The Economic Data Rundown

Employment

New employment data will not be released until March 8, 2024.

Consumers and Inflation

The US inflation rate for January increased slightly to start the year, to 3.09%. Inflation has hovered in the 3 percent range since July, though it just logged its lowest Year-over-Year (YoY) level since then. Core Inflation decreased slightly to 3.86% in January, nonetheless logging its 10th consecutive monthly decline. The monthly US Consumer Price Index rose 0.3% in January, and monthly US Personal Spending inched up 0.2%. The Federal Reserve held its key Fed Funds Rate at 5.50% at its January 31st, 2024 meeting, marking the Fed’s fourth consecutive meeting in which rates were left unchanged.

Production and Sales

The US ISM Manufacturing PMI failed to break into expansion territory, falling by 1.3 points in February to 47.8. December US Retail and Food Services Sales contracted by 0.8% Month-over-Month (MoM), while the YoY US Producer Price Index increased by 0.9%.

Housing

MoM US New Single-Family Home Sales increased 1.5% in January, and MoM US Existing Home Sales increased by 3.1% to 4.00M in January. The Median Sales Price of Existing Homes fell 0.6% to $379,100 in January, a seventh straight monthly decline, putting it 7.6% below its all-time high set in June 2023. Mortgage rates increased slightly in February; the 15-year Mortgage Rate rose to 5.94% as of February 29th, and the 30-year ended the month at 6.94%.

Commodities

The price of Gold went largely unchanged in January to end the month at $2,048.10 per ounce. Crude oil prices continued higher in February—the price of WTI was 3% higher at $78.53 per barrel, while Brent rose 1.2% to $84.01, both as of February 26th. Higher oil prices led the average price of gas to increase 13 cents per gallon in February, closing the month at $3.37 per gallon.

As always, don’t hesitate to contact us if you have any questions about what impact, if any, this may have on your financial plan.

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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk.

The economic forecasts set forth in this material may not develop as predicted, and there can be no guarantee that strategies promoted will be successful.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.

Monthly Market Recap – February 2024

Markets Marching Higher

The Economic Data Rundown