Economic Update – February 27, 2023

THE WEEK ON WALL STREET

Concerns over a firmer monetary policy were heightened by fresh economic data, touching off a climb in bond yields and a slide in stock prices last week.

The Dow Jones Industrial Average skidded 2.99%, while the Standard & Poor’s 500 dipped 2.67%. The Nasdaq Composite index sagged 3.33% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, retreated 1.23%.1,2,3

STOCKS SLIDE

Stocks struggled last week, buffeted by growing fears of further Fed tightening and disappointing forecasts from two major retailers that called into question the consumer’s health. The release of the minutes from the Federal Open Market Committee’s (FOMC) last meeting did little to assuage investor worries. Reflecting these concerns of a more aggressive Fed was that by Thursday, traders were pricing in a 27% chance that the Fed might lift rates by a half percentage point at its next meeting, far above the 1.3% chance just one month ago.4

Stocks took another leg lower on Friday following the release of January’s Personal Consumption Expenditures (PCE) price index, which showed hotter than expected price increases and more robust consumer spending.

FOMC MINUTES

Minutes from the last FOMC meeting indicated that nearly all members agreed with February’s quarter-point rate increase, though some would have supported a 50 basis point rate hike to move quicker towards the Fed’s target range. While the minutes suggested another 25 basis point hike is likely at their next meeting, investors remain anxious that more recent economic data may prompt a 0.50% hike instead.5

The minutes stressed that inflation was still too high. However, members diverged on the economy, with some members finding the risk of recession elevated. In contrast, others feel the Fed may engineer a soft landing or avoid a recession altogether.6

TIP OF THE WEEK
Those changing marital status should review their insurance coverage in light of changing needs.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: Durable Goods Orders.

Tuesday: Consumer Confidence.

Wednesday: Institute for Supply Management (ISM) Manufacturing Index.

Thursday: Jobless Claims.

Friday: Institute for Supply Management (ISM) Services Index.

Source: Econoday, February 24, 2022

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.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Workday, Inc. (WDAY).

Tuesday: Occidental Petroleum Corporation (OXY), Target Corporation (TGT), AutoZone, Inc. (AZO), Ross Stores, Inc. (ROST), Agilent Technologies, Inc. (A).

Wednesday: Salesforce, Inc. (CRM), Lowe’s Companies, Inc. (LOW), Dollar Tree, Inc. (DLTR).

Thursday: Broadcom, Inc. (AVGO), Costco Wholesale Corporation (COST), Best Buy Co., Inc. (BBY), Marvell Technology, Inc. (MRVL), Dell Technologies, Inc. (DELL)..

Source: Zacks, February 24, 2022

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.

CITATIONS:

1. The Wall Street Journal, February 24, 2023
2. The Wall Street Journal, February 24, 2023
3. The Wall Street Journal, February 24, 2023
4. The Wall Street Journal, February 22, 2023
5. The Wall Street Journal, February 23, 2023
6. CNBC, February 22, 2023

QUOTE OF THE WEEK
“Winning Starts With Beginning”
Author Unknown

THE WEEKY RIDDLE
About 90% of this country’s land area is made up of arid tan desert, yet its flag was once solid green (until 2011) – in fact, at one time it was the only nation in the world with a flag containing just one color. What nation is this?

LAST WEEK’S RIDDLE:
Four grown men decided to play on the sidewalk for 3 hours. No one chided them for childish or immature behavior, many appreciated the noise they made. They even went home a bit richer. What were these men doing?
ANSWER: The four men were street musicians

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Jerry Slusiewicz may be reached at 949-219-0692 or 800-449-9501
jerry@pfpinvest.com
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This Economic Update should not be construed as a solicitation or an offer to buy or sell any public or private securities. Securities offered through Pacific Financial Planners. Please check with a Financial Advisor regarding your specific needs before making any investment decisions.

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Learn More About Mandee

In preparation for her continuing the family business and taking over full time once Dee retires, Mandee Carter, the Vice President and Associate Advisor of the Carter Financial Group, has been working alongside her father running the day-to-day business and learning the ropes, so to speak, since 2017.

Mandee received her BS in Psychology in 2016 and started her career in the Financial Industry in 2010 when she started helping in the office. After acquiring her degree, she came on full-time in March 2017 as Dee’s business partner and Main Associate Advisor helping clients navigate the intricacies of investing for retirement and overall successful financial planning.

In 2021, she was named an Elite Producer with American Equity amongst other accolades.

In Mandee’s spare time, she likes to go to the gym, spend time with her boyfriend, friends and family. She is an animal lover and rescuer. She has 2 German Shepherds that she rescued from the shelter 6 years ago. She still enjoys almost all things Psychology related and is constantly researching something. She enjoys meeting new client prospects and likes speaking with her current clients. She loves helping people.