Weekly Market Vibes

March 6, 2023

Market Recap

WEEK OF FEB. 27 THROUGH MAR. 3,  2023 

The  S&P 500 index rose 1.9% last week, led by the materials sector,  as investors were encouraged by stronger-than-expected services sector data  and a Fed official's comments supporting a "slow and steady"  approach to monetary policy.

The  market benchmark ended Friday's session at 4,045.64, up from last Friday's  closing level of 3,970.04.

On  Tuesday, the S&P 500 closed out February with a 2.6% monthly loss as  investors worried about the impacts of inflation and interest rate increases  on the economy. Concerns were magnified last month after companies including  Home Depot (HD) and Walmart (WMT) issued weaker-than-expected earnings  guidance.

However,  the index is still up 5.4% for the year to date thanks to a 6.2% January jump  that had come on hopes for the pace of rate increases to slow.

While  concerns about the pace of rate increases weighed on the market in February,  investors found some comfort on Thursday in comments from Atlanta Fed  President Raphael Bostic, who told reporters that "slow and steady is  going to be the appropriate course of action."

Investors  were also encouraged on Friday by two reports showing US services sector  activity was stronger than projected in February. The Institute for  Supply Management's purchasing managers' index for February came in  higher than the consensus estimate and showed a second consecutive month of  growth. Separately, S&P's services PMI gauge for February ended a  seven-month sequence of contraction and surpassed the consensus estimate.  S&P's report also showed year-ahead output expectations were the strongest  since May 2022.

The materials sector  had the largest percentage increase last week, up 4%, followed by increases  of 3.3% each in communication services and industrials. Just  two sectors fell: Utilities slipped 0.7% and consumer staples edged  down 0.4%.

In  the materials sector, shares of Steel Dynamics (STLD) rose 15% on the week as  the steel producer and metals recycler reported a 25% boost to its quarterly  dividend payment.

In  communication services, shares of Facebook parent Meta Platforms (META) climbed  8.8%. The company said it is slashing the price of two virtual reality  headsets and it will implement -- either fully or partially -- most of the  recommendations made by its independent oversight board regarding its  so-called "cross-check" content moderation system.

In  industrials, shares of Union Pacific (UNP) gained 7.9% as the railroad  company said it expects to name a new chief executive this year that will  take over from Lance Fritz, who has been CEO since February 2015. The plan  prompted BofA Securities to upgrade its investment rating on Union Pacific's  shares to buy from neutral while raising its price target on the stock to  $241 each from $218.

On  the downside, the decliners in utilities included shares of Sempra (SRE),  which fell 2.8% from a week ago as the energy infrastructure company reported  Q4 revenue below analysts' mean estimate.

Next  week, economic data will be fairly light earlier in the week but all eyes  will be on February jobs data later in the week.

January  factory orders are due on Monday, followed by January wholesale  trade and consumer credit on Tuesday. February private-sector  jobs data from ADP will be released on Wednesday, followed by weekly  jobless claims on Thursday and the February nonfarm  payrolls and unemployment reports on Friday.

Provided  by MT Newswires


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