The past week provided a lot of intrigue and plot twists for investors as several important data points were revealed. On Tuesday, the inflation data for February was released, coming in a touch hotter than expected. Although overall monthly inflation was in-line with expectations, Core CPI was .4 percent, which was higher than the .3 percent expected by analysts prior to the news release. Annual inflation was also higher than expected as analysts believed annual inflation was 3.1 percent in February.
As a result, bond yields rose during the 10-year Treasury note auction that was held Tuesday afternoon. The highest yield was 4.17 percent compared to 4.09 percent the last time that the 10-year bond auction occurred. It was also the highest yield for this type of bond in 2024. However, the 30-year bond auction on Wednesday saw a high of 4.33 percent, which was slightly lower than the 4.36 percent recorded last month.
On Thursday, retail sales and price producer index (PPI) data was released. Retail sales were up .6 percent compared to an expected increase of .8 percent over the past month. Core retail sales were up .3 percent compared to an expected increase of .5 percent. However, prices accelerated faster than expected in February with Core PPI coming in at .3 percent compared to an expected .2 percent increase. Meanwhile, the overall PPI figure came in at .6 percent compared to an expected increase of .3 percent.
Unemployment claims data for the past seven days was also released on Thursday. There were 209,000 requests for benefits made during that time period compared to an expected 218,000. This week’s figure was also slightly lower than last week’s revised figure of 210,000.
On Friday, the Empire State Manufacturing Index was released and came in at negative 20.9. That figure was significantly lower than the expected negative seven, and it was also the fourth straight month in which the index indicated a decline in manufacturing.
Finally, the University of Michigan released its consumer sentiment and inflation expectation reports. Consumer sentiment came in at 76.5 percent while inflation was expected to be at 3 percent a year from now.
The S&P 500 finished the week up 5.78 points to close at 5,117. This was a .11 percent increase over the past five trading days that saw the market rally between Monday and Wednesday before reversing. On Wednesday, the market made a weekly high of 5,177 before making a weekly low of 5,105 on Friday morning. The S&P is up a little over 2 percent this month and is up 7.89 percent year-to-date.
Unlike the S&P, the Nasdaq was down this week finishing 82.43 points lower to close at 15,973. This represented a drop of .51 percent over the past five trading days. As with the S&P, the Nasdaq began the week on a high note before peaking on Tuesday, reversing on Wednesday and making a low on Friday. The weekly high was 16,266 while the weekly low was 15,927. Year-to-date, the Nasdaq has returned 8.18 percent.
The Dow was able to make it two out of three major indices to finish in profit for the week. It finished up 63.79 points to close at 38,714, which was an increase of .17 percent from the previous week. The index would make its high of the week on Wednesday peaking at 39,135 while making a low of the week on Friday of 38,622. Year-to-date, the index has returned 2.65 percent.
In international news, Japan announced on Monday that its PPI was up .6 percent on an annualized basis. There were also reports this week that the Bank of Japan (BOJ) may be ready to abandon its policy of negative interest rates. Great Britain announced on Tuesday that its monthly GDP improved to .2 percent from negative .1 percent a month ago.
This upcoming week will feature important news reports from the United States and other developed economies. On Wednesday, the Fed will make its March rate decision while Fed Chair Jerome Powell is expected to speak on Friday. Japan and Australia will make interest rate decisions sometime on Monday or Tuesday. Meanwhile, Canada will be releasing its inflation data on Tuesday while a multitude of releases will come out across the Eurozone on Thursday.