In Markets "In a Nutshell"

Markets “In a Nutshell” for February 20, 2024

Investment Week at a Glance

Stocks finished mixed for the week.  The Dow Jones Industrial Average was flat, the S&P 500 was down 0.40%, and the NASDAQ fell 1.30%. Foreign stocks (MSCI EAFE) were up 1.40%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.28%.  (Data source: Wall Street Journal)

CPI Comes in Hotter Than Expected

CPI increased by 0.3% in January, an acceleration from the 0.2% we saw in December. This was a surprise to markets and not a good one. Stocks fell on the news and rates spiked as expectations for a Fed rate cut keep getting pushed back with more and more data coming in. With this new CPI read, the market is now looking at a June rate cut for the Fed. Coming into the year market expectations were 6-7 rate cuts, now it would seem that 2-3 cuts are realistic depending on the new inflation data. Yields have shown this as the 10-year has climbed back up to 4.27% after being at 3.78% in late December. Higher rates will continue to put a strain on certain sectors that are interest rate sensitive, such as housing. Higher yields mean higher mortgage rates which leads to people being able to afford less of a house.

Tech Continues to Lead the Way

Tech has continued to lead the way in 2024 which is exactly what we saw in 2023. Tech is up nearly 7% already for the year while 4 of the 11 sectors are in negative territory for the year. In the past 12 months, tech has beaten every other sector by nearly 20%. This comes despite the headwind of higher rates that typically puts strain on tech as growth companies need to take on more debt to grow. The “Magnificent 7” continues to push the overall market higher as those 7 stocks are up over 11% for the year. The market could see some volatility if the inflation data continues to be hotter than expectations but so far the “Magnificent 7” has been able to keep the market moving higher.



How much is the Dow Jones up for the year? (Scroll Down for Answer)

  1.     2%
  2.     4%
  3.     6%
  4.     8%
















Answer below.



Have a Great Week!

















1.    2%.   The Dow has had a good start to the year despite lagging the other indices that have more tech within them.