Feb 164 min
by Ben Weiss, for the Call to Leap Team
Happy Valentine's Day and Presidents Day, everyone! This week, I'm showing myself some self-love by continuing to save and invest for my future, as always. Who says spending money on your (future) self isn't a good thing?
Following an exciting Super Bowl and with a long weekend ahead, it felt like the market was stuck in a bit of a holding pattern. Let's take a look at what happened this week and what's coming up...
The market this week
We saw mixed green and red on the market this week with more shallow gains and losses compared to the higher-energy weeks recently. As you can see in the heatmap above, more green than red covers the page, but some of heavy hitters in the Magnificent 7 appeared to take a step back, causing some modest downward drag on the broader market.
By the numbers, S&P 500 (-0.42%), the Dow Jones (-0.07%), Nasdaq (-1.28%), Russell 2000 (+0.90%) finished with mixed results for the week. NVDA and pharmaceutical company Eli Lilly (LLY) continued their impressive marches up and to the right, while MSFT, GOOGL, and AAPL slipped lower. Historically, the market on average has posted lower returns in the first three months of the new year so I wouldn't be too surprised to see investors take a breather from the solid bullish run we've been seeing, at least in the short term.
Did you know?...Speaking of the Super Bowl, last year's big game was the second-most watched US telecast ever, coming in behind only the Apollo 11 landing on the moon. Well, that record didn't last long—this year's Super Bowl smashed the record with 123.4 million viewers watching at once, with an even more mind-boggling 202.4 million watching at least some of part of the game through the various broadcast channels. Maybe the $7-million-per-30-second TV ad price tag was worth it for those companies who shelled out...
In the news
This week, we received mixed data about the health of the economy and progress on tackling inflation—a good news, bad news kind of week, if you will.
Personally, I always like to hear the negative news first. The Bureau of Labor Statistics reported the Consumer Price Index (CPI) rose 0.3% in January, slightly more than the expected 0.2%. Much of the rise in the CPI, which measures prices that us consumers face for goods and services, can be attributed to higher "shelter prices"—another name for how much it costs to rent a home. Producer Price Index (PPI) data also came in slightly higher than forecasted, rising 0.3% in January versus 0.1% expected.
"Hotter" than expected CPI and PPI data may suggest that inflation is taking longer to bring down than expected but the general consensus is that we are headed in the right direction. Chairman Jerome Powell recently reminded us simply, "This is a good economy" and that we are making good progress combating inflation. And Lisa Sturtevant of Bright MLS added helpful context by saying:
"Inflation is generally moving in the right direction, but it’s important to remember that a lower inflation rate does not mean that prices of most things are falling — rather, it simply means that prices are rising more slowly."
In addition to the broader year-over-year decline in the CPI, we also received positive news that unemployment claims declined for the week, pointing to a robust and resilient labor market.
We've earned a break...While lots of companies reported earnings this week like every week, we didn't see any major announcements as earnings season has passed. Phew!
SPY
On the charts for both SPY and QQQ here, you'll see two sets of channel lines (orange and green). In both cases, I see a more-macro upward trend dating back to early 2023, however recently I've observed a secondary, steeper breakout trend that I wanted to point out as well. Do you agree with how I drew my lines or do you see it differently? Let's chat on Discord!
QQQ
Friendly reminders from Steve:
Let your money work harder for you...
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You got this, everyone! Stay disciplined, pay yourself first, and always invest in your greatest asset—yourself. 🙌🏻
-Ben and Steve
The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article do not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.