The S&P 500 (SP500) on Friday slipped 0.28% for the week to end at 4,079.09 points, posting losses in three out of five sessions. Its accompanying SPDR S&P 500 Trust ETF (NYSEARCA:SPY) fell 0.19%.
This was only the third weekly loss for the benchmark index in 2023 so far, but it came on the heels of a more than 1% retreat last week.
News this week was dominated by economic data on inflation and what it meant for the future of the Federal Reserve’s path on rate hikes. It led to volatile trading sessions throughout the week in which Wall Street’s major indices stumbled to several mixed finishes.
On Tuesday, the highly anticipated consumer price index report for January came in hotter-than-expected. Moreover, data on Thursday showed that producer prices also rose more-than-expected in January. The numbers have sparked concerns that there was still a lot more work to be done to combat inflation and that the Fed would see reason to keep hiking rates until it saw fit.
Comments from several central bank speakers this week have been overall quite hawkish, with a few such as Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard even saying that they favored 50 basis point rate hikes rather than the current 25 basis points.
Other than the two inflation reports, the weekly economic calendar showed that retail sales surged in January, suggesting that consumer spending has remained strong, which in turn could keep prices elevated.
Traders also digested data in the form of industrial production, the Empire State manufacturing survey, housing starts and permits, weekly jobless claims, the Philly Fed business outlook, import/export prices, leading indicators and selected services revenue.
The fourth quarter earnings season continued to chug along during the week. Major names that announced results included beverage giant Coca-Cola (KO), vacation rental firm Airbnb (ABNB), online gaming platform Roblox (RBLX), streaming company Roku (ROKU), Canada’s Shopify (SHOP) and farm equipment maker Deere (DE).
Next week will see reports from retail giants such as Walmart (WMT) and Home Depot (HD), which should shed some light on the state of consumer spending during the all important holiday sales quarter. Chip giant NVIDIA (NVDA) is also on tap.
The week also saw the release of regulatory filings by hedge funds and investors disclosing their stakes and holdings in companies at the end of the fourth quarter. Amongst the most high profile of them was Warren Buffett’s Berkshire Hathaway (BRK.B) (BRK.A). The firm loaded up on its stake in Apple (AAPL) while shedding some of its shares in Taiwan Semiconductor Manufacturing (TSM) and some of its traditional banking stocks.
Turning to the weekly performance of the S&P 500 (SP500) sectors, six of them ended in the red. Energy saw an outsized fall of nearly 7% amid falling crude oil futures, partly due to data that showed a surge in U.S. crude oil inventories. Consumer Discretionary led the gainers. See below a breakdown of the weekly performance of the sectors as well as their accompanying SPDR Select Sector ETFs from Feb. 10 close to Feb. 17 close:
#1: Consumer Discretionary +1.64%, and the Consumer Discretionary Select Sector SPDR ETF (XLY) +1.63%.
#2: Utilities +0.90%, and the Utilities Select Sector SPDR ETF (XLU) +1.14%.
#3: Consumer Staples +0.90%, and the Consumer Staples Select Sector SPDR ETF (XLP) +0.97%.
#4: Industrials +0.75%, and the Industrial Select Sector SPDR ETF (XLI) +0.87%.
#5: Communication Services +0.23%, and the Communication Services Select Sector SPDR Fund (XLC) +0.71%.
#6: Financials -0.31%, and the Financial Select Sector SPDR ETF (XLF) -0.27%.
#7: Information Technology -0.39%, and the Technology Select Sector SPDR ETF (XLK) -0.40%.
#8: Health Care -0.42%, and the Health Care Select Sector SPDR ETF (XLV) -0.38%.
#9: Materials -0.95%, and the Materials Select Sector SPDR ETF (XLB) -0.89%.
#10: Real Estate -1.35%, and the Real Estate Select Sector SPDR ETF (XLRE) -1.27%.
#11: Energy -6.92%, and the Energy Select Sector SPDR ETF (XLE) -6.34%.
Below is a chart of the 11 sectors’ YTD performance and how they fared against the S&P 500. For investors looking into the future of what’s happening, take a look at the Seeking Alpha Catalyst Watch to see next week’s breakdown of actionable events that stand out.