Markets “In a Nutshell” for February 12, 2024
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average was flat, the S&P 500 was up 1.40%, and the NASDAQ rose 2.30%. Foreign stocks (MSCI EAFE) were flat. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.16%. (Data source: Wall Street Journal)
S&P 500 Hits 5,000
The S&P 500 closed above 5,000 for the first time on Friday. Although 5,000 is nothing more than a psychological threshold, it does show the climb equities have been on and the current momentum in the market. Recession fears have come down substantially over the past year as the consumer has been surprisingly resilient despite higher rates. Household finances remain strong but have weakened a bit as mortgage delinquency rates have now risen to above pre-pandemic levels. Overall wage gains are still strong which is helping the consumer and with markets and real estate moving higher, consumer confidence continues to be high.
Have Fed Rate Hikes Slowed Economy?
Although consumer spending has not shown a slowdown in the economy, some areas have cooled off due to higher rates. The Fed had its most aggressive rate-hiking cycle in 40 years, and it has shown in the housing and manufacturing sectors, two of the most interest-rate-sensitive sectors of the economy. Housing has slowed as higher mortgage rates are scaring new buyers away, and at the same time making people who have 3% mortgages feel trapped as they don’t want a new 7% mortgage. Another area that has felt the pain of higher rates is regional banks and commercial real estate. With more people working from home, there has been a ton of office space that is now not being used. With the Fed now looking at when to cut rates, these sectors could see a boost in activity in the near future as rates could come down soon.
How many people watched the Super Bowl last year? (Scroll Down for Answer)
Have a Great Week!
2. 115 million. The numbers are not in yet for this year, but many expect a record breaking number, due in part to the new NFL fans that Taylor Swift has brought over.