Week Ending January 14 Financial Markets Update

In a break from the norm we also wanted to share the below link geared towards those effected by the recent wild fires outside of Boulder, CO. As we embark on a new year it is a good reminder to review P&C Insurance with your agent. He or she can certainly help to address any shortfalls in your coverage so that you are prepared should a similar event touch your household.

Equities ground down with the S&P 500 returning -0.29% last week. Inflation pressure and worries about how fast the Federal Reserve will tighten weighed on equities. CPI inflation was released at a 7.0% year-over-year rate, while the PPI (producer price index) year-over-year was 9.7%. The inflationary indicators signaled to investors that a rotation out of growth names and into value names aligned with higher costs for many companies. This is one of the more pronounced rotations we have seen in the growth/value trade since November 2020 after the COVID vaccine was approved. 

U.S. Treasury bond yields increased across the yield curve last week, led by yields on the 2-year and 3-year Treasury notes. On Wednesday, CPI data indicated consumer prices rose half a percent in December, 0.1% above the consensus estimate.The inflation in December was broad-based, impacting all industries to some degree. The week wrapped up with retail sales data indicating a decline in December of 1.9%, well below the expected decline of 0.1%. The large decline in retail sales in December is largely attributed to the pull forward in holiday shopping driven by the fear of shortages by consumers.

The interpretations and organizations of these ideas are the confidential thoughts of 1st & Main Investment Advisors and do not represent the opinions of BFCFSDifferent types of investments involve varying degrees of risk including market fluctuation and possible loss of principal value. There can be no assurance that any specific investment strategy will be profitable. *some content provided by First Trust Portfolios L.P.  Member SIPC and FINR

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