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Weekly Market Recap

February 3, 2023

The S&P 500 rose again this week and is up nearly 8% so far in 2023. This week’s rally was led by the Communication and Technology sectors, while the Energy sector lagged. Stocks sold off 1% on Friday, however, after a very strong monthly jobs report increased concerns that the Fed might continue on its path of interest rate hikes for longer, which would further slow the economy. 517,000 jobs were added in the month of January, lowering the national unemployment rate to 3.4%, the lowest in over 50 years. The jobs number was well above expectations and may have been affected by seasonal adjustments. On Wednesday, the Federal Reserve raised the overnight lending rate by 0.25%, as expected, to a range of 4.5-4.75%. The strong jobs report seemingly solidified the chance of a Fed hike on March 22nd and increased the odds of yet another rate hike in May to more than 50-50. The ISM Manufacturing report stayed in contraction territory, but the ISM Services report surprised to the upside into growth territory. About half of major companies have reported fourth quarter results and earnings season continues to be below average. At the market level, earnings are expected to grow very little this year, with Q1 and Q2 showing year-over-year declines before growth resumes in the second half of the year. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.

Ryan P. Johnson, CFA, CFP®
Managing Director of Investments

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