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Weekly Market Update - 1/17/2023 (by Mariann Montagne, CFA)


All data is for the week ended January 13, 2023. Note the U.S. markets were closed yesterday in honor of Dr. Martin Luther King, Jr.


Stocks

Stocks rose again last week on a good inflation report from the US. The S&P 500 rose 2.71%, the Russell 2000 added 5.27% and the Nasdaq gained 4.83%. Overseas, the developed market index (MSCI EAFE) increased 4.25% while the emerging markets added 4.18%. In the US, consumer discretionary and technology were the best performing sectors while staples and health care were the laggards. By style, growth outperformed value and smaller caps outperformed large caps.1


Fixed Income

Interest rates dropped last week following Wednesday’s inflation report (see Economic Data below). The benchmark 10-year treasury yield dropped 6 basis points to close the week at 3.49%. The yield curve spread (difference between 2-year and 10-year treasury yields) remains inverted, now at 73 basis points.2


Commodities

Last week, oil prices booked their largest weekly increase since October as investors look to rising demand out of China in a post-Covid scenario. The price of West Texas crude oil ended the week at $79.86 per barrel, up 8.3% for the week and at the high end of its range over the past month of $72.84-80.26 per barrel.3


Economic Data

Inflation was about in line with expectations, falling by 0.1% in December from November and having risen 6.5% over the past year; this was the smallest increase in 14 months. On a core basis, excluding food and energy, the consumer price index rose 0.3% in December, slightly higher than the previous month and reflecting a decline in the prices of used vehicles and airfares. The core rate rose 5.7% for the past year.4

The consumer sentiment index rose 4.9 points in January to 64.6, ahead of consensus expectations and the highest since April. Both current conditions and the outlook for the next six months have improved in the consumers’ mind.5


Company News6

JP Morgan Chase (JPM), a Core Select and G50 holding, reported revenue and earnings that exceeded the consensus estimates. Additionally, on its conference call, management estimated that $12 billion will be allocated for share repurchases.7 Shares rose 3.68% for the week.


Nvidia Corp. (NVDA), a Core Select and G33 holding, was among the largest percentage gainers in the semiconductor industry last week as the broader chip sector continued to rise to start the new trading year. Late in the week, news of reduced capital spending by Taiwan Semiconductor (TSM), a G40i holding, was well received by the market due to fears of rising inventories and pricing pressures across the sector.8 Shares of Nvidia rose 13.73% for the week while those of Taiwan Semiconductor rose 11.18%.


Did you know…

China invented fireworks, but Italy gave them color. Colors are created using metallic powders. Calcium makes orange, sodium makes yellow and barium makes green. Also, cylindrical tubes create whistling sounds, aluminum flakes make hissing noises and flash powder makes the loud “booms.”


Mariann Montagne, CFA

Portfolio Manager


Sources:

1 JP Morgan Weekly Market Recap 1-16-2023

2 US Treasury

3 Oilprice.com

4 Bureau of Labor Statistics 1-12-23

5 University of Michigan Consumer Sentiment 1-13-23

6 All weekly changes in company stock prices: Yahoo Finance

7 JP Morgan Chase press release 1-13-23

8 Taiwan Semiconductor press release 1-12-23

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