Weekly Market Snapshot : February 26th

February 26, 2020

Chief Economist Scott Brown discusses the latest market data.

In his monetary policy testimony, Chair Powell said that the Fed is a long way from achieving its inflation and employment goals. As expected, Powell downplayed concerns about higher inflation and an asset bubble. Nevertheless, long-term interest rates continued to rise, distressing stock market participants.

Personal income jumped 10.0% in January, boosted by an increase in pandemic support (checks to individuals and extended unemployment benefits) and amplified by how the numbers are reported (monthly figures at an annual rate). Consumer spending jumped 2.4%, led by an 8.4% increase in consumer durables. Spending on consumer services rose 0.7%, down 5.3% from a year ago. The PCE Price Index rose 0.3% in January (+1.5% y/y), up 0.3% ex-food & energy (+0.252% before rounding, +1.5% y/y). The core CPI rose 0.031% (+1.4% y/y).

Next week, February economic figures are likely to reflect ongoing strength. The ISM surveys should show continued growth in new orders, some pickup in employment, and input price pressures (there’s no measure of output prices, which would be useful). Friday’s job market report is expected to signal a return of job growth, following a soft patch in the last few months, but there may be some seasonal noise. The two surveys that make up the employment report should have missed the worst of the month’s poor weather. Fed Chair Powell will speak on Thursday.

Indices

 LastLast WeekYTD return %

DJIA	31402.01	31493.34	2.60%
NASDAQ	13119.43	13865.36	1.79%
S&P 500	3829.24	3913.97	1.95%
MSCI EAFE	2233.61	2222.06	4.01%
Russell 2000	2200.17	2218.39	11.41%

Consumer Money Rates

 Last1 year ago

Prime Rate	3.25	4.75
Fed Funds	0.08	1.58
30-year mortgage	3.27	3.29

Currencies

 Last1 year ago

Dollars per British Pound	1.4015	1.291
Dollars per Euro	1.2175	1.088
Japanese Yen per Dollar	106.21	110.43
Canadian Dollars per Dollar	1.260	1.333
Mexican Peso per Dollar	20.853	19.281

Commodities

 Last1 year ago

Crude Oil	63.53	48.73
Gold	1775.40	1643.10

Bond Rates

 Last1 month ago

2-year treasury	0.14	0.12
10-year treasury	1.46	1.09
10-year municipal (TEY)	1.72	1.06

 

Treasury Yield Curve – 02/26/2021

As of close of business 02/25/2021

 

S&P Sector Performance (YTD) – 02/26/2021

 As of close of business 02/25/2021

Economic Calendar

March 1	—	Construction Spending (January)
	—	ISM Manufacturing Index (February)
March 3	—	ADP Payroll Estimate (February)
	—	ISM Services Index (February)
	—	Fed Beige Book
March 4	—	Jobless Claims (week ending February 27)
	—	Factory Order (January)
	—	Fed Chair Powell Speaks (“conversation on the U.S. economy”)
March 5	—	Employment Report (February)
	—	Trade Balance (January)
March 10	—	Consumer Price Index (February)
March 12	—	Producer Price Index (February)
March 16	—	Retail Sales (February)
	—	Industrial Production (February)
March 17	—	FOMC Policy Decision

 

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor's returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business February 25, 2021.