Weekly Market Update
By Michael McKeown, CFA, CPA - Chief Investment Officer
Chart of the Week
Mid-cap companies in the S&P 400 Index, with an average size of $6 billion, represent a good snap shot of diverse industries and household company names. Analysts lowered mid-cap earnings expectations over the past year and now expect earnings to fall 1% over the next 12 months; in prior downturns in earnings, the forecast has gone down much more. The silver lining is that expectations and the price of those earnings fell dramatically this past year. The price-to-earnings ratio is now below 15, which happened less than 10% of the time since 1990.
What We’re Reading
Everything You Can’t Have – Morgan Housel
Retirement Income and Safe Withdrawal Rates in 2023 – Morningstar
The Road Ahead: Lessons from The 1970s – Man Institute
Finally Catching Up: Is there an Opportunity in Small Caps? – JPMorgan
Podcast of the Week
What Zillow Knows About the Housing Market in 2023 – Top of Mind
The Past Week
The first few days of February were action packed with the Fed slowing rate hikes to 0.25% and the blowout January jobs report. We had a break from major data releases last week. Consumer sentiment improved while jobless claims increased.
The Week Ahead
As if it escaped anyone’s mind, inflation comes to the forefront with the monthly CPI report on Tuesday. Economists expect a rise from prior months. The key to watch will be services excluding housing, which the Fed is monitoring and influencing the path of interest rate hikes.
Thank you for reading.
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