Weekly Market Bullets

for the week ending 1/27/2023

• The strong start to the year continued for the US Equity Markets last week as hopes increased that the US may avert a recession and manage a "soft landing" despite realtively poor earnings reports. The S&P 500 rose 2.5% for the week to increase its gains for the year to 6.0%. The Nasdaq rallied 4.3% for the week and is now up 11.0% for the year, while the Russell 2000 (small cap stocks) was up 2.4% for the week to bring its gains for the year to 8.5%.

• Global Equity Markets rose last week amid positive economic data out of Asia. Developed Markets were up 1.4% for the week on continued strength in Asian equities, bringing gains for the year to 7.3%. Emerging Markets also increased 1.4% for the week and are now up 9.1% for the year. 

• Q4 US Economic Growth was better than expected with more positive inflation data. The Personal Consumption Expenditure (PCE) Price Index for December showed a year-over-year increase of 5.0%, down from 5.5% in November. The Core PCE Price Index, which excludes food and energy prices, showed a year-over-year gain of 4.4%, down from 4.7% in November. The preliminary estimate for US Gross Domestic Product (GDP) growth for Q4 was 2.9%, better than the 2.6% expected but down from 3.2% in Q3 2022.

• US Corporate Earnings reports have generally come in worse than expected thus far. With 29% of the S&P 500 companies reporting results, the blended earnings decline for Q4 is -5.0%, worse than the -3.2% expected at the end of December. Of the companies reporting, 69% have beaten earnings forecasts, which is below the 5-year (77%) and 10-year (73%) averages. About 60% of companies have topped sales forecasts, also below the 5-year (69%) and 10-year (63%) averages.

Market Data

for the week ending 1/27/2023