Weekly Market Watch

Market Outlook

All major domestic indices reached new year-to-date lows last week. The S&P 500^® had its first 10% correction since 2023 and has gone 17 sessions without two consecutive positive days. Large cap also lagged smaller cap and value stocks for the week. We continue to believe, despite the near-term volatility and weakening sentiment surveys, economic data remains healthy. For example, both the Consumer Price Index (CPI) and the Producer Price Index (PPI) were lower than their previous readings, and inflation-adjusted wage growth accelerated to its strongest level since November. This week, we expect consumer spending data to provide clarity on the path of the cycle; it was the February 14 retail sales report that sparked initial consensus concerns that consumer activity is weakening. Additionally, no change is expected to the Federal Reserve’s policy rate or positive view of the cycle coming out of this week’s Federal Open Market Committee (FOMC) meeting.

Chart of the Week

The recent S&P 500 correction has coincided with a spike in the Bloomberg Economic Global Trade Policy Index to the highest level on record.

We believe negative sentiment is driving markets lower, rather than a sharp decline in economic activity or corporate earnings.

We continue to recommend large-cap quality exposure to withstand market uncertainty..

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