The S&P 500 (SP500) on Friday added 1.90% so that the week ends at 4,045.54 points, recording gains in three of five sessions. Your Companion SPDR S&P 500 Trust ETF (NYSEARCA:SPY) up 1.97% for the week.
With the weekly advance, the benchmark index managed to snap a three-week losing streak. The index also closed a volatile February with a almost 3% drop on Tuesday, pressured by concerns about the Federal Reserve’s rate hike sparked by strong economic data.
That pattern initially continued this week. However, on Thursday a Fed official said the central bank may be in a position to pause its rate hike this summer, helping to prop up markets. That positivity held through Friday and helped the S&P 500 (SP500) to its weekly gain.
Market participants this week have recalibrated their outlook so that the maximum terminal fee is now at least 5.5%, with a fraction of the market even considering 6%. Traders appear to have become more comfortable with the direction of the central bank.
Meanwhile, this week’s economic data has suggested both a booming economy and a tight job market. With the Fed in a hawkish mood, any numbers pointing to a robust economy have raised concerns about higher interest rates.
On Wednesday, the ISM’s indicator of manufacturing activity for February rose for the first time in six months, although it remained in contraction territory. On top of that, the S&P Manufacturing PMI rose in February. The reports showed that there was still strength in the economy and that the cooling effects of high interest rates had not yet been felt.
On Thursday, the number of Americans filing initial jobless claims dropped unexpectedly. In addition, fourth-quarter unit labor costs rose, even as average productivity marked its biggest annual drop in nearly 50 years. The numbers demonstrated continued resilience in the labor market.
The weekly economic calendar also saw a surprising drop in the Chicago PMI for February and the Conference Board’s monthly measure of consumer confidence.
The week also saw the fourth quarter earnings season start to wind down. Notable companies that reported their results included retail giants Target (TGT) and Costco (COST), department store chain Macy’s (M), electric vehicle maker Rivian Automotive (RIVN), home improvement retailer Lowe’s (LOW) and cloud computing company Salesforce (CRM). ).
As for the weekly performance of the S&P 500 (SP500) sectors, nine of the 11 finished in the green, led by Materials and Communication Services. Utilities and consumer staples were the two sectors that ended up in the red. See below for a breakdown of weekly sector performance, as well as the corresponding SPDR Select Sector ETFs from the close on February 24 to the close on March 3:
#1: Materials +4.02%and the SPDR Materials Select Sector ETF (XLB) +4.20%.
#2: Communication Services +3.27%and the Select Communication Services Sector (XLC) SPDR Fund +2.85%.
#3: Industrial +3.25%and the Select Industrial Sector SPDR ETF (XLI) +3.35%.
#4: Energy +2.94%and the Energy Select Sector SPDR ETF (XLE) +3.07%.
#5: Information Technology +2.93%and the Technology Select Sector SPDR ETF (XLK) +2.98%.
#6: Consumer Discretionary +1.61%and the Select Sector Consumer Discretionary SPDR ETF (XLY) +1.70%.
#7: Real Estate +1.55%and the Real Estate Select Sector SPDR ETF (XLRE) +1.63%.
#8: Finance +0.79%and the SPDR Select Financials ETF (XLF) +0.93%.
#9: Health Care +0.51%and the Select Health Care Sector SPDR ETF (XLV) +0.51%.
#10: Consumer Staples -0.41%and the SPDR (XLP) Select Consumer Staples Sector ETF -0.23%.
#11: Utilities -0.69%and the Utilities Select Sector SPDR ETF (XLU) -0.54%.
Below is a chart of the YTD performance of the 11 sectors and how they fared against the S&P 500. For investors looking ahead of what’s going on, take a look at Seeking Alpha Catalyst Watch for a breakdown of the actionable events of the coming week that stand out. .
