Happy St. Patrick’s Day! The major U.S. stock indexes slipped for the second week in a row, as the market’s solid daily gain on Tuesday was offset by declines later in the week. The modest two-week retreat was in contrast with the four-month rally that preceded it. A period when the S&P 500 rose 16 out of 18 weeks. The pullback provides an opportunity to get back into stocks if you have been sitting on the sidelines. I believe we are very much in a bull market and the overall direction of the market will continue to be higher. With it being St. Patrick’s day, I have broken down this week’s update using Irish sayings.
As you slide down the bannister of life, may the splinters never point the wrong way.
Inflation and interest rates have slid down to a manageable level. Unfortunately, it hit a snag this week. A pair of reports showed that inflationary pressures remain stubborn, even as U.S. interest rates remain at their highest level since 2001. A report issued Tuesday on consumer prices and a Thursday update on producer prices both recorded price gains that were slightly higher than most economists had expected. The Consumer Price Index (CPI) came in at an annual 3.2% rate in February, up from 3.1% the previous month. The inflation numbers support my opinion that the Fed is unlikely to be in a rush to cut rates. Inflation stalling hurt bond prices which had been rallying prior to this week. Bonds had a terrible week as yields of U.S. government bonds rose as the markets digested latest inflation. After retreating the previous week to 4.08%, the yield of the 10-year U.S. Treasury bonds climbed to close at 4.31% on Friday.
May your troubles be less and your blessings be more. And nothing but happiness come through your door.
After all troubles U.S retailers experienced during the pandemic, they have been seeing more blessings. Even though February’s 0.6% gain in U.S. retail sales was slightly below the consensus estimate of economists, retailers seem to be in a better position. The results are still positive and a big improvement from the 1.1% decline recorded in January and on the whole much better than we were during the pandemic.
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