Weekly Market Commentary February 5th to February 9th 2024

In a relatively quiet week for economic releases, the S&P 500 hit a milestone, surpassing 5,000 for the first time in history. A positive reaction to the Seasonal CPI Revisions sent the market higher despite only marginal adjustments. Minor upticks in October and November were overshadowed by a lower-than-expected reading in December. After all the data was recorded, Core Consumer Price Index (CPI) for the prior three months remained at a 3.3% annualized rate.

The Institute for Supply Management (ISM) released its January Services Purchasing Managers’ Index (PMI) which remained in expansionary territory for the thirteenth straight month. A reading above 50 indicates growth in the services industry. In January, Services recorded a 53.4 reading, well above expectations of 52 as all major components surpassed expectations – New Orders, Prices Paid, and Employment.

S&P Global’s U.S. Services PMI came in at 52.5 in January, down from a preliminary reading of 52.9, but still its strongest reading in seven months. U.S. firms expressed further optimism as New Orders, specifically from exporters, improved during the month. Both indices confirmed expansion in the very important services industries.

The S&P 500 finished at an all-time high, up 1.4% for the week at 5,026, while the Dow Jones finished at 38,674, relatively unchanged for the week. The Nasdaq continued to churn higher, finishing at 15,990, up over 2%. The 10-Year U.S. Treasury yield was 14 bps higher after the final trading session of the week at 4.17%.

Key economic releases next week include updates on the Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Sales.