2023 | February 27

The Markets

Stocks Fall

Each of the major U.S. stock indexes fell around 3%, sustaining their biggest weekly declines of 2023. After starting the year on a mostly positive note, the S&P 500 recorded its third negative week in a row, and the Dow slipped into negative territory year to date.

The cautious sales outlooks that two major U.S. retailers offered on Tuesday for the rest of 2023 helped trigger a broad market sell-off. The S&P 500, the NASDAQ, and the Dow all fell more than 2% for the day; government bond prices also declined, sending yields higher.

The U.S. Federal Reserve’s preferred gauge for tracking inflation rose 0.6% from December to January—the largest month-to-month increase since last June. The bigger-than-expected rise in the Personal Consumption Expenditures Price Index weighed on stocks Friday, as it puts more pressure on the Fed to continue lifting interest rates to try to control inflation.

Fresh worries about inflation and the course of further interest-rate hikes weighed on prices of government bonds, sending the yield of the 10-year U.S. Treasury bond to its highest level in three and half months. The yield rose on Friday to 3.94%, up from 3.83% at the end of the previous week. The 2-year note’s yield also jumped, climbing to 4.78%.

Although the U.S. Federal Reserve slowed the pace of interest-rate hikes at its most recent meeting on February 1, minutes from the session that were released on Wednesday showed that Fed officials believe “ongoing” rate hikes will continue to be necessary. They said they need to see further evidence of a broad easing in price pressures before they’ll be confident that inflation is “on a sustained downward path.”

The U.S. economy grew at a slightly slower pace in the fourth quarter of 2022 than originally estimated, according to a revised government release on Thursday. GDP expanded at an annualized rate of 2.7% in the latest quarter, down from an initial 2.9% estimate released a month earlier. The downward revision was attributed in part to slower consumer spending than initial data had shown.

Separate surveys on consumer confidence in the United Kingdom and Germany both recorded monthly gains, rebounding from recent lows. The U.K.’s consumer confidence reading was the highest in nine months and marked the biggest improvement in nearly two years. 

Although Japan’s inflation rate remains low relative to rates in other major developed economies, its latest monthly inflation figure spiked to the highest level in four decades. Core inflation rose to 4.2%, excluding costs for fresh food. It marked the tenth consecutive month that Japan’s inflation exceeded the 2.0% target set by the nation’s central bank. 

Source: John Hancock Investment Management

Presentation at Montgomery Bell Academy

Fund with Money Idioms

We know that money doesn’t grow on trees, but that doesn’t stop us from saying it. We also say that people bring home the bacon, time is money, and money talks. These all are idioms – phrases that don’t mean what they say. For instance, money doesn’t really talk. Every country has its own money slang. See what you know about global money idioms by taking this quiz.

1. In Germany, they may say that someone ‘lives like a maggot in bacon.’ It means:

a. They borrow from others and do not repay them

b. They live a decadent lifestyle

c. They pay too much for everything

d. They live in a house full of flies

2. In Poland, this saying describes a person who doesn’t like to spend money:

a. To slide in on a shrimp sandwich

b. To be eating cables

c. To be as phony as a $3 bill

d. To have a snake in your pocket

3. If you live in Spain and ‘have more wool than a lamb,’ then you:

a. Are very rich

b. Talk about money too much

c. Shop at expensive stores

d. Prefer natural fabrics

4. In Holland, if you ‘buy something for an apple and an egg,’ what have you done?

a. Bartered for goods

b. Paid too much

c. Found a real bargain

d. Are a vegetarian

Whenever you need help getting your financial ducks in a row, get in touch. We’re happy to share our two cents!

Answers: 1) b; 2) d; 3) a; 4) c

Past performance does not guarantee future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, strategy, or product (including those recommended or undertaken by AJ Advisors, LLC), or any non-investment related content, made reference to directly or indirectly in this communication will be profitable, equal any indicated historical performance level(s), be suitable for your portfolio or individual circumstances, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. You should not assume that any discussion or information contained in this communication serves as the receipt of, or as a substitute for, personalized investment advice. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to their individual situation, they are encouraged to consult with the professional adviser of their choosing. AJ Advisors, LLC is neither a law firm nor a certified public accounting firm and no portion of the content herein should be construed as legal or accounting advice. If you are an AJ Advisors, LLC client, please remember to contact the firm, in writing, if there are any changes in your financial situation or investment objectives or if you wish to impose, add, or modify any reasonable restrictions on our investment advisory services. Until so notified, AJ Advisors, LLC will continue to rely on the most recent information provided. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available upon request.