Leaps and Bounds

Last week saw an abbreviate trading window and markets riding a rollercoaster of volatility surrounding the state of Artificial Intelligence (AI). When the results came in, tailwinds blew strong and markets bounded to new highs. Small caps lagged, due in part to less strong tech exposure, and the Magnificent 7 drove most of the index gains. Fedspeak in the past week remained hawkish, although Walmart earnings brought insight into disinflationary pressures and consumers continuing to migrate towards discount retailers.

AI worries were the strongest theme in markets last week, with concerns that progress might be sputtering. Of course, Nvidia’s knockout earnings dispelled most fears. The technology has quickly grown from Sci-Fi movie scripts to household/corporate staples. Nvidia is seen as a proxy for the ever-changing space, as their Graphical Processing Unit (GPU) chips were originally used for their fast image processing, then crypto mining, and now AI computing needs. With Nvidia continuing to win and meet business demand, the market felt safe remaining bullish on the new space.

Weekly Performance

   

Data Source: Factset®        Performance Period:      2/19/2024    2/23/2024

In FOMC news, the January 2024 meeting minutes were released last week and reinforced the narrative of “higher-for-longer” rates. The markets, however, are still expecting to see rate cuts later this year. Key minutes takeaways are the continued data dependence of the Fed in deciding when to cut rates and a strong preference to continue current policy in case inflation re-emerges. Currently, markets are pricing in the start of rate cuts in July.

Last week was lighter on broad econometric data, due to the shortened week, but we feel that was more than made up for by Nvidia earnings and FOMC minutes. In unemployment, we saw weekly initial1 and continuing claims1 tick downward to 201.0k and 1,862k, respectively. We saw an increase in existing home sales2 for January with the print rising to 4,000k from 3,880k. Lastly, we saw the Markit PMI composite1 come it at 51.4 (a value over 50 represents businesses bullish on the economy, while a value under 50 represents bearish sentiment).

Next week, we get to experience a “leap day,” giving us an extra day this year. Leap days occur every four years to keep calendar years synchronized to our planet’s orbit around the sun. But they are not the only part of time keeping that we adjust. We also have leap seconds added to compensate for differences in the day designed to keep days aligned into weeks. Although our calendars and clocks are imperfect, each day we count is special. This year, we get an extra opportunity to enjoy the gift He has given us to serve Kingdom purpose. “This is the day the Lord has made; We will rejoice and be glad in it.” – Psalm 118:24

1. Seasonally Adjusted 2. Seasonally Adjusted Annualized Rates Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights. Securities offered through American Portfolios Financial Services, Inc. of Holbrook, New York, 631.439.4600,(APFS), member FINRA, SIPC.  Faithward Advisors is not owned or operated by APFS. Faithward Advisors offers Investment Advisory services through Ambassador Advisors, an SEC Registered Investment Advisor. Dream More, Plan More, Do More is a registered trademark of Faithward Advisors, LLC, Reg. U.S. Pat. & Tm. Off. Any opinions expressed in this forum are not the opinion or view of Faithward Advisors or American Portfolios Financial Services, Inc. (APFS). They have not been reviewed by either firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.