February 13, 2023

Weekly Market Update

By Michael McKeown, CFA, CPA - Chief Investment Officer

Weekly Market Update

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.

S&P 400 Mid Caps - PE Ratio

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 Past Week

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.

The Week Ahead

Thank you for reading.

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