1/17: Weekly Economic Update from PMG Wealth Mgmt.

January 17, 2023

THE WEEK ON WALL STREET

Stocks rallied last week thanks to fresh confirmation of inflation’s cooling trend and growing optimism that an inflation slowdown may provide the Fed with space to ease up on future rate hikes.

The Dow Jones Industrial Average gained 2.00%, while the Standard & Poor’s 500 advanced 2.67%. The Nasdaq Composite index surged 4.82% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, jumped 3.32%.^1,2,3

IMPROVING SENTIMENT

Investor sentiment came into the new year weighed down by recession fears and concerns that Fed rate hikes may “go higher for longer.” Last week a different narrative emerged. Sustained declines in inflation, a rate hike cycle nearing an end, and a resilient economy that may avoid recession resulted in a broad-based rally.

Moderating inflation was evident in the Consumer Price Index (CPI) report released on Thursday, which, in combination with a strong labor report the previous Friday, gave investors confidence that the environment for stocks had improved. Stocks extended their gains to end the week as a few money center banks kicked off a new earnings season with upbeat reports.

INFLATION'S COOLING TREND

December’s CPI report showed a 0.1% decline in prices from November and a 6.5% increase from a year ago. It was the sixth-consecutive month of decelerating year-over-year increases. Core prices (excludes food and energy) slowed to 5.7%, a decline from the previous month’s 6.0% year-over-year rise. For the last three months, core prices have risen at an annualized rate of 3.1%–the slowest pace in over a year.⁴

Falling gasoline prices (-9.4%) accounted for most of the monthly decline in the CPI. Used car prices (-2.5%) were another bright spot.⁵

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: Producer Price Index (PPI). Retail Sales. Industrial Production.

Thursday: Housing Starts. Jobless Claims.

Friday: Existing Home Sales.

Source: Econoday, January 13, 2023

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

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THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: The Goldman Sachs Group, Inc. (GS), Morgan Stanley (MS), The Charles Schwab Corporation (SCHW).

Wednesday: United Airlines Holdings, Inc. (UAL), The PNC Financial Services Group, Inc. (PNC), Prologis, Inc. (PLD).

Thursday: Netflix, Inc. (NFLX), The Procter & Gamble Company (PG),

Friday: Schlumberger Limited (SLB), PPG Industries, Inc. (PPG).

Source: Zacks, January 13, 2023

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 return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Phil Guerrero, CFP®

President

Wealth Advisor

phil@pmgwealth.com

George Maroudas

Wealth Advisor

george@pmgwealth.com

Terry Maziarka

Client Service Manager

terry@pmgwealth.com

847.550.6100

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WEEKLY QUOTE

"I didn't know that I was different and now I realize how very different I was. But difference is what makes the world beautiful."

Venus Williams

WEEKLY TIP

Ward off impulse buying with a 30-day list. If you feel like you have to have something, put it on your 30-day list. See if you still have the urge to buy it after 30 days; chances are, you won't.

WEEKLY RIDDLE

You need to take a galloon of oil out of a barrel of oil. How can you do it using only a 3-galloon container and a 5-galloon container?

LAST WEEK'S RIDDLE

It is a short and simple word, and something that everyone needs. Put an 'r" on the end and you have a new friend, but if the first letter goes away, you are sad. What is the word?

ANSWER: Love.

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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.

All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.

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CITATIONS:

1. The Wall Street Journal, January 13, 2023

2. The Wall Street Journal, January 13, 2023

3. The Wall Street Journal, January 13, 2023

4. The Wall Street Journal, January 12, 2023

5. CNBC, January 12, 2023