Economic Update – January 9, 2023

THE WEEK ON WALL STREET

A strong Friday rally triggered by fresh signs of moderating inflation pushed stocks into positive territory to begin the new year.

The Dow Jones Industrial Average rose 1.46%, while the Standard & Poor’s 500 advanced 1.45%. The Nasdaq Composite index gained 0.98%. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.90% higher.1,2,3

STOCKS RALLY

A new year did little to change the market’s overall tenor as trading remained choppy. The first two trading sessions of a holiday-shortened week saw major averages swing wildly between gains and losses as investors balanced an improving outlook on inflation against concerns of faltering economic growth. Mega-cap technology and other high-growth names endured the brunt of the
selling pressure.

Stocks took a decisive turn lower Thursday on strong private payroll growth and declining jobless claims, which heightened fears that the Fed would need to push interest rates higher for longer. However, stocks staged a powerful rally on Friday despite another strong job number, partly due to a deceleration in wage growth.

THE LABOR MARKET JUGGERNAUT

The Fed has communicated that it’s looking for weakening in the labor market before it can feel confident higher rates are working to slow inflation. Employment reports last week indicated that the Fed might need to wait a bit longer for evidence of a fading labor market.

Automated Data Processing’s (ADP) monthly employment report showed the private sector adding more jobs (235,000) than consensus estimates (153,000), with strong wage gains over the last year (+7.3%). Initial and continuing jobless claims fell in the last week of December and remained at
pre-pandemic levels. Finally, the government’s monthly employment report showed employers adding a healthy 223,000 jobs in December.5

TIP OF THE WEEK
Update your will. It is just as important as having one. If you drafted a will years ago, the information is likely in need of some adjustments. Be sure to revisit your will often and keep it up to date.

THE WEEK AHEAD: KEY ECONOMIC DATA

Thursday: Consumer Price Index (CPI). Jobless Claims.

Friday: Consumer Sentiment.

Source: Econoday, January 6, 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

Friday: Bank of America Corporation (BAC), JPMorgan Chase & Co. (JPM), Delta Air Lines, Inc. (DAL), UnitedHealth Group Incorporated (UNH), Citigroup, Inc. (C), Wells Fargo & Company (WFC), BlackRock, Inc. (BLK).

Source: Zacks, January 6, 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, January 6, 2023
2. The Wall Street Journal, January 6, 2023
3. The Wall Street Journal, January 6, 2023
4. CNBC, January 5, 2023
5. The Wall Street Journal, January 5, 2023
6. The Wall Street Journal, January 6, 2023

QUOTE OF THE WEEK
“A pessimist sees the difficulty in every opportunity; an optimist sees
the opportunity in every difficulty.”
WINSTON CHURCHILL

THE WEEKY 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 this word?

LAST WEEK’S RIDDLE:
What word doesn’t belong in this group: blast, paper, castle, coin, box, storm?
ANSWER: Coin. Why? Because you can put the word “sand” in front of all of the other words in
the group.

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(Don’t worry – we’ll request their permission before adding them to our mailing list.)
Jerry Slusiewicz may be reached at 949-219-0692 or 800-449-9501
jerry@pfpinvest.com
pfpinvest.com

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.