February Market Commentary: Powell’s Not Done

Feb 04

January Recap and February Outlook

 

The market adage is “as January goes, so goes the year.” Is it true? According to an analysis by Fidelity, January returns are positive about 75% of the time the full year turns out positive.

The rally was certainly a relief after last year’s dismal performance, and while stocks and bonds are still positively correlated, the return to solid bond performance at least means the 60/40 has a chance of righting the ship.

But the data continues to be open to interpretation. Strong economic indicators like employment, a better-than-expected earnings season, and consumer spending don’t seem to match up to the very rapid change in GDP expectations.

Let’s get into the data:

• 12-month CPI was 6.5% in December. The Bureau of Labor Statistics reported the number was the smallest increase since October 2021.
• The January non-farm payroll number was 517,000. The report from the Department of Labor was 187,000 jobs above... ...