The Week on Wall Street

Stocks fell last week as investors reacted to disappointing inflation updates and other economic reports that fell short of estimates.

Stocks Snap Winning Streak

Markets were quiet Monday but opened lower Tuesday in response to the January inflation report that showed higher-than-expected consumer prices. But stocks regained some momentum on Wednesday and rallied Thursday despite disappointing reports on both retail sales and industrial production for January.1,2

News of higher-than-expected wholesale prices on Friday put investors back on edge and kept stocks from ending the week on a positive note. The weekly loss broke a five-week winning streak.3

Inflated Perspective

Consumer Price Index data was one of the big pieces of news driving markets last week, with January’s numbers coming in at 3.1 percent compared to a year prior—cooler than December’s 3.4 percent year-over-year gain but warmer than the 2.9 percent consensus. Jittery Investors focused on the hotter-than-expected part.4

With the consumer report closely followed by disappointing inflation news on the producer level, attention quickly shifted to the Fed and what’s next for interest rates. While the Fed has indicated short-term rates may trend lower in 2024, the January inflation reports support Fed Chair Powell’s recent comments that the Fed is in no hurry to cut rates.4

Weekly Riddle

What can explode slowly, with no smoke or flame?

 Last week’s riddle: If a single-engine airplane taxied not onto a runway but onto an enormous conveyor belt whose speed precisely equaled that of the plane in the opposite direction, could the plane still manage to take off?

Answer: Yes, eventually. A plane’s wheels roll freely, and the thrust generated by the prop or jet engine will still be greater than drag, and the lift created by air flowing over the wing will still be greater than the aircraft’s weight.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
www.grandcanyonplanning.com

Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

Weekly Tip

Taking a Side Gig? Here’s How It May Affect Your Taxes

Taxpayers who work in the gig economy may benefit from a better understanding of how their work affects their taxes.

Here are some things taxpayers should know about the gig economy and taxes:

  • Money earned through this work may be taxable.
  • There are tax implications for the company providing the platform and the individual performing the services.

This income may be taxable even if the taxpayer providing the service doesn’t receive a Form 1099-MISC, Form 1099-K, or Form W-2. This income may also be taxable if the activity is only part-time or side work or paid in cash.

*This information is not intended to be a substitute for specific, individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov5

The Week Ahead

Key Economic Data

Tuesday: Leading Indicators.

Wednesday: FOMC Meeting Minutes.

Thursday: Jobless Claims. Existing Home Sales. U.S. Fed Balance Sheet.

Source: Investors Business Daily – Econoday economic calendar; February 15, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

Companies Reporting Earnings

Tuesday: Walmart Inc. (WMT), The Home Depot, Inc. (HD), Palo Alto Networks, Inc. (PANW)

Wednesday: NVIDIA Corporation (NVDA)

Thursday: Intuit Inc. (INTU), Booking Holdings Inc. (BKNG)

Friday: Berkshire Hathaway Inc. (BRK.A, BRK.B)

Source: Zacks, February 15, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.