The S&P 500 Index (SP500) on Friday. advanced 0.95% for the week which ended at 5,137.08 points, recording gains in three out of five sessions. The related SPDR S&P 500 Trust ETF (NYSEARCA:SPY) added 0.98% for the week.
The second consecutive weekly advance of the reference index was recorded it closed above the historical threshold of 5,100 points for the first time. The milestone represents a benchmark for a bull run on Wall Street that has now seen the S&P index (SP500) reports gains in sixteen out of eighteen weeks. Additionally, the Nasdaq Composite average (COMP.IND) also rose during the week and posted both a new intraday all-time high and a record closing high, more than two years after setting previous levels.
Markets moved largely sideways Monday through Wednesday as traders remained cautious ahead of the week’s main event: Thursday’s Personal Income and Expenditures report. The data painted a mixed picture on inflation. On one hand, the Personal Consumption Expenditure (PCE) price index, the Federal Reserve’s preferred price indicator, came in right on target. On the other hand, the indicator rose to its highest monthly level in almost a year, underscoring the sticky nature of current inflationary trends.
However, the inline core PCE reading, combined with weak manufacturing data during the week and declining consumer confidence, led market participants to slightly increase their expectations of an early interest rate cut by the Fed According to CME’s FedWatch tool, the probability of a 25 basis point rate cut by the central bank at its May monetary policy committee meeting is now about 27%, up from 23% a week ago .
“PCE price data has been the focus of many over the past week. January’s data was quiet in the sense that it came in fairly close to consensus expectations, but it was notable in that it showed a flat month for cores (and ‘supercore’) which raises questions about the underlying trajectory of consumer prices,” said JPMorgan’s Michael Feroli.
“While the 0.4% increase in the core PCE price index in January marked the largest monthly gain in a year, the relative inflation rate a year ago continued to moderate (reaching 2.8% on annual basis) and we believe inflation will continue to moderate over time through some mixed monthly reporting,” Feroli added.
Thursday also marked leap day and the end of February. Over the month, the S&P 500 index (SP500) rose by 5.10%. The benchmark index is now on a four-month winning streak.
Cryptocurrencies have also attracted a lot of attention this week. Bitcoin (BTC-USD), the world’s largest cryptocurrency, is on track to gain more than 21% for the week. The rise has seen it surpass the $60,000 mark for the first time in two years, and its all-time high is now in sight.
The fourth quarter earnings season continued to wind down this week, even as some big names reported their results. Chief among these was Dow 30 component Salesforce (CRM), with the cloud-based software company impressing investors with its earnings and guidance. Other companies that reported their results include cruise operator Norwegian Cruise Line (NCLH), department store chain Macy’s (M), Chinese internet giant Baidu (BIDU), e-commerce company eBay (EBAY ) and PC and electronics maker Dell Technologies (DELL ).
As for the weekly performance of the S&P 500 (SP500) sectors, six closed in the green, led by a 2.5% gain in the technology sector. Healthcare has overcome the losers. Below is a breakdown of the performance of the sectors and their associated SPDR Select Sector ETFs from the close of February 23rd to the close of March 1st:
No. 1: Information Technology +2.51%and the Technology Select Sector SPDR ETF (XLK) +2.65%.
No. 2: Real estate +2.11%and the Real Estate Select Sector SPDR ETF (XLRE) +2.12%.
No. 3: Consumer Discretionary +2.04%and the SPDR Consumer Discretionary Select Sector ETF (XLY) +2.06%.
#4: Energy +1.30%and the Energy Select Sector SPDR ETF (XLE) +1.30%.
#5: Materials +1.16%and the Materials Select Sector SPDR ETF (XLB) +1.27%.
No. 6: Industrials +1.00%and the Select Industrial Sector SPDR ETF (XLI) +1.08%.
#7: Financials -0.07%and the Financial Select Sector SPDR ETF (XLF) -0.02%.
No. 8: Communication services -0.31%and the SPDR Fund for the selected communications services sector (XLC) +0.38%.
No. 9: Basic necessities -0.54%and the SPDR Select Sector Consumer Staples ETF (XLP) -0.45%.
#10: Utilities -0.63%and the SPDR ETF Utilities Select Sector ETF (XLU) -0.42%.
#11: Healthcare -1.05%and the SPDR ETF Health Care Select Sector ETF (XLV) -1.05%.
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