Stocks rallied last week thanks to fresh confirmation of inflation’s cooling trend and growing optimism that an inflation slowdown may provide the Fed with space to ease up on future rate hikes.
The Dow Jones Industrial Average gained 2.00%, while the Standard & Poor’s 500 advanced 2.67%. The Nasdaq Composite index surged 4.82% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, jumped 3.32%.1,2,3
Investor sentiment came into the new year weighed down by recession fears and concerns that Fed rate hikes may “go higher for longer.” Last week a different narrative emerged. Sustained declines in inflation, a rate hike cycle nearing an end, and a resilient economy that may avoid recession resulted in a broad-based rally.
Moderating inflation was evident in the Consumer Price Index (CPI) report released on Thursday, which, in combination with a strong labor report the previous Friday, gave investors confidence that the environment for stocks had improved. Stocks extended their gains to end the week as a few money center banks kicked off a new earnings season with upbeat reports.
Inflation’s Cooling Trend
December’s CPI report showed a 0.1% decline in prices from November and a 6.5% increase from a year ago. It was the sixth-consecutive month of decelerating year-over-year increases. Core prices (excludes food and energy) slowed to 5.7%, a decline from the previous month’s 6.0% year-over-year rise. For the last three months, core prices have risen at an annualized rate of 3.1%–the slowest pace in over a year.4
Falling gasoline prices (-9.4%) accounted for most of the monthly decline in the CPI. Used car prices (-2.5%) were another bright spot.5
This Week: Key Economic Data
Wednesday: Producer Price Index (PPI). Retail Sales. Industrial Production.
Thursday: Housing Starts. Jobless Claims.
Friday: Existing Home Sales.
Source: Econoday, January 13, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: The Goldman Sachs Group, Inc. (GS), Morgan Stanley (MS), The Charles Schwab Corporation (SCHW).
Wednesday: United Airlines Holdings, Inc. (UAL), The PNC Financial Services Group, Inc. (PNC), Prologis, Inc. (PLD).
Thursday: Netflix, Inc. (NFLX), The Procter & Gamble Company (PG).
Friday: Schlumberger Limited (SLB), PPG Industries, Inc. (PPG).
Source: Zacks, January 13, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Tax Benefits for Charitable Giving
Giving back to others feels good and is a great way to support your community and those in need, but it also has tax advantages. According to the IRS, most charitable contributions are deductible as an itemized deduction when you file your taxes, including cash and property contributions.
Some contributions aren’t tax-deductible, so check the current tax law or talk to your account before deducting charitable gifts from your tax return. You can even use the Interactive Tax Assistant on the IRS website to see if your charitable contribution is deductible.6
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Goals That Stick
Remember, your goals should be specific, measurable, actionable, realistic, and timely. Here are some to get you started:
- Eat more whole foods (set a particular number based on your lifestyle).
- Drink more water (put a specific number of ounces you want to hit).
- Sit less and move more (ex: standing up once per hour for 12 hours).
- Go for a 15-minute walk every day.
- Get at least 7 hours of sleep.
We’d love to know: what goals are you setting this winter?
Tip adapted from Healthline7
Savory Breakfast Bowl
Time: 20 mins
This filling and hearty Breakfast Bowl is made with potatoes, eggs, veggies, and avocado. It’s the perfect way to start the day or can be enjoyed for a healthy lunch or dinner.
- 2 teaspoons olive oil
- 1 small clove garlic, minced
- 2 cups spinach
- ½ cup halved cherry or grape tomatoes
- ¼ avocado, sliced
- ½ cup Everything Bagel Potatoes
- 1 to 2 eggs (fried, scrambled, soft boiled, whatever your preference)
- Sea salt and freshly ground black pepper, to taste
- Sprinkle of feta cheese or nutritional yeast, optional
- Fresh herbs such as parsley, chives, or basil, if desired
- Hot sauce or salsa, optional
- In a small skillet, heat the olive oil over medium heat. Add garlic; cook 30 seconds. Add spinach and tomatoes; cook, stirring often, until softened, 2 to 3 minutes.
- Cook eggs to your desired preference, fried, scrambled, or soft boiled.
- Combine potatoes, spinach, tomatoes, avocado, and egg in a bowl. Season with salt and black pepper, to taste. Garnish with feta cheese or nutritional yeast and herbs, if using. You can also sprinkle extra everything bagels seasoning on top. Serve warm with a few dashes of hot sauce, if desired.
Footnotes and Sources
1. The Wall Street Journal, January 13, 2023
2. The Wall Street Journal, January 13, 2023
3. The Wall Street Journal, January 13, 2023
4. The Wall Street Journal, January 12, 2023
5. CNBC, January 12, 2023
6. IRS.gov, November 15, 2022
7. Healthline, December 23, 2019
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
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