Published Every MondaySince 2007| Volume 844 | January 30, 2023
So far YTD these many weeks were markets were up (Bull picture shown), down (Bear picture), or draw (Bull/Bear picture) … Bulls (Markets UP) =03… Bears (DOWN) = 01… and Draw = 0
Markets rise on a positive inflation and GDP reports
The DOW was up +539 points or +1.6%, S&P500 was up +92 points or +2.3%, and the Nasdaq was up +450 points or +4.0% for the week ending January 27th. Oil was down -$2.02 or -2.5%% to $79.38 per barrel.
The PCE index (Personal Consumption Expenditure Price Index) slowed in December
PCE slowed in December to 5.0% annually from 5.5% in the prior month. PCE number is closely watched by the Federal Reserve to assess inflation in the economy. PCE is a measure of the prices that people living in the US, or those buying on their behalf pay for goods and services. It is known for capturing inflation or deflation across a wide range of consumer expenses and changes in their behavior, and considered by the Federal Reserve as more reliable.
CPI(Consumer Price Index) is a measure of the average change over time in the prices paid by consumers for goods and services. Simply put PCE sources data from businesses and CPI sources data from consumers.
The U.S. GDP grows at an annual rate of 2.9% in the Q4, 2022
Source- NY Times
The U.S. government reported that the Q4 2022 Gross Domestic Product (GDP) grew by 2.9% annual rate. Even though GDP is considered a rear view number which is showing us what happened in the last three months, it is a positive sign for the economy despite the forward view showing a slow down on various fronts. Core inflation is still high which will force the Feds to keep raising interest rates to slow down the economy. The increase in interest rate has already raised mortgage rates which has slowed housing sales. Reduced home sales negatively impacts capital products, like white goods sales (washer, dryers, refrigerators,…) which can have a spiraling effect on businesses, suppliers, consumer spending, and job market.
The key driver for this exciting growth is increase in the consumer and business spending despite recent layoffs in the Tech industry to almost pre-pandemic levels. Consumer spending makes up for about 2/3rd of US GDP and it is critical for the US economy.
The GDP is the key measure of economic growth, such as,GoodsandServices produced by the nation. Below +3% is considered modest growth. Two consecutive negative GDP numbers are considered to indicate the economy is in recession.
Congratulations! Your 2022 portfolio performance was better by 2% beating S&P 500 and most of the wall street experts in the business, again!
Your portfoio = -17.4%
vs. S&P500 = -19.4%
2023 the DOW is +2.5%, S&P500 is +6.0% and the NASDAQ is +11.0%
2022 the DOW was -8.8%, S&P500 was -19.4% and the NASDAQ was -33.1%
2021 the DOW was up +18.7%, S&P500 +26.9% and the NASDAQ +21.4%
In 2020 the DOW was up +7.2%, S&P500 UP+16.3% and the NASDAQ UP +43.6%
In 2019 the DOW was up +22.3%, S&P500 up +28.9% and the NASDAQ up +35.2%
In 2018 the DOW was down -6.7%, S&P500 down -7.0% and NASDAQ down -4.6%.
In 2017 the DOW was up 25.1%, S&P500 up 19.4% and the NASDAQ up 28.2%