Last Week’s Summary
- S&P 500 Index rose 1.49%
- International Equities rose 2.76%
- Emerging Markets rose 2.80%
- U.S. 10-Year Treasury Yield fell to 4.47%
- Initial Jobless Claims fell to 213k
- CPI rose to 3.0%; Core rose to 3.3%
- PPI rose to 3.5%; Core rose to 3.6%
- Retail Sales Advance fell to -0.9%
- Industrial Production fell to 0.5%
What to Watch for This Week
- M, 2/17/25 MARKET CLOSED FOR PRESIDENT’S DAY
- T, 2/18/25 Empire Manufacturing
- W, 2/19/25 MBA Mortgage Applications, Housing Starts, FOMC Meeting Minutes
- Th, 2/20/25 Initial Jobless Claims, Continuing Claims, Leading Index
- F, 2/21/25 S&P Global US Manufacturing PMI, U. of Mich. Sentiment, Existing Home Sales
Weekly Market Recap
The S&P 500 hovered near its all-time highs, while the bond market ended the week with solid gains as weaker-than-expected retail sales rekindled hopes for Federal Reserve rate cuts. A rally in Treasuries drove the 10-Year Yield below 4.5%, marking its fifth consecutive week of gains-the longest streak since 2021.
Money markets have fully priced in the first Fed rate cut by September. U.S. retail sales saw their steepest drop in nearly two years in January, signaling a sharp pullback in consumer spending following a strong year-end surge in 2024.
Meanwhile, faster inflation in the U.S. could prove a “blessing in disguise” for financial markets, as it may compel President Donald Trump to scale back potential trade tariffs. Looking ahead, next week will be a shortened trading week due to the President’s Day holiday on Monday.
With few major economic data releases on the calendar, the highlight will be the FOMC meeting minutes from the Fed’s first meeting of 2025, set for release on Wednesday.
The slower pace of data and the minutes could provide the market with an opportunity to digest recent developments and establish a clearer direction following this week’s conflicting inflation and retail sales reports. At a time when investors are seeking clarity, mixed signals and uncertainty remain the biggest hurdles for the market.
60-Second Breakdown:
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
HOW to Invest like a PRO!
Bryan Bourgeois, CEO/Founder of Shorebreak Capital, discusses why 90% of investors fail and how to avoid these common investment mistakes with Conner Small, Partner at Redwood Investment Management, Shorebreak Capital’s dedicated asset manager.
