The Weekly Wrap: February 21, 2023

Week in Review

The NASDAQ continues to lead equity gains in 2023, as the tech-heavy index rose 0.6% last week. Both the S&P 500 and the Dow Jones Industrial Average, meanwhile, ended up in the red. The US Dollar Index rose for the third week in a row, putting a lid on commodity prices. Crude oil fell 4%, and gold prices dropped 1.3%. Bitcoin rose nearly 8%, adding to its impressive year-to-date gains, while 10-Year Treasury futures flipped into negative territory for the first time all year.

Relatively Speaking

Risk-on sectors are outpacing risk-off areas of the market over the past month. Consumer Discretionary has risen 7.5%, while Information Technology and Communication Services have each more than doubled the return of the benchmark S&P 500. Energy stocks have brought up the rear, lagging the index by nearly 9%.

Year-to-date performances are largely the same. Growth-focused sectors like Consumer Discretionary, Communication Services, and Information Technology are outperforming the broader index, with each up by double-digits. Risk-off and value-oriented sectors are lagging. It’s the inverse experience of 2022, when tech-like stocks led the market selloff.

What’s Ahead

Markets are closed on Monday as we celebrate the birth of George Washington. On Tuesday, look for preliminary results from S&P Global’s February PMI surveys. We’ll also get the January number for existing home sales. Minutes from the latest FOMC meeting come on on Wednesday, before a flurry of data arrives to end the week. On Thursday, it’ll be the second read on Q4 GDP, along with the Chicago Fed’s National Activity Index, and the Kansas City Fed’s Manufacturing Index. On Friday, we’ll get the January measure for the Fed’s preferred measure of inflation, the PCE deflator. We’ll also get personal income and spending, new home sales, and results from the latest University of Michigan Consumer Sentiment survey.

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