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Recap | Week Ahead | CPI Thumbnail

Recap | Week Ahead | CPI

"Show me the incentive, and I will show you the outcome." - Charlie Munger

Last week's market recap: 

  • The S&P 500 closed the week down -2.26%.  Year-to-date the index is up 17.75%
  • NASDAQ closed the week down -2.84%.  YTD the index is up 33.53%
  • U.S. Aggregate Bond index was down -.59% for the week.  YTD the index is up 1.29%
  • 10-Year Treasury Rate increased, ending the week at 4.05% up from 3.96% the prior week
    • Fed Funds Target rate is currently 5.25-5.50%
  • The 1-Year Treasury is yielding 5.34%  
  • A 6 Month Treasury is yielding 5.47%  


The week ahead:  

  • Earnings Week – UPS, Disney, Eli Lilly, etc.
  • Inflation Data – CPI and PPI
  • Consumer Sentiment Data  


Does the U.S. debt downgrade matter?  

Yes and No.  Last week, the ratings agency Fitch downgraded U.S. debt from AAA to AA+.  

  • This matters because it puts a spotlight on growing federal debt.  Eventually politicians will need to solve this problem, probably with a combination of reduced spending and tax hikes. 
  • However, it didn’t cause large forced selling of U.S. debt like it did in 2011 when Standard & Poor’s downgraded our debt.  It’s an especially silly downgrade when you consider that other countries who depend on the stability of the U.S. and depend on our military have a higher credit rating.  The Fitch downgrade has been mostly ignored by the markets.
    • Right now, these are the countries with a higher credit rating than the U.S.A:
      • Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Luxembourg, Canada, and Australia

Quick Comments:   

  • Last week the dollar strengthened and U.S. stocks went lower.  This inverse correlation has been holding true for the past 18 months.
  • Bond Yields went higher, which means bonds went down.
  • Earnings were mostly better than expected.
  • Jobs data was mixed.    
  • Markets are looking at data to answer:  When will the Fed be finished raising rates?

Source: JP Morgan *

As always, let us know if you have any questions.



CRA Investment Committee 

Matt Reynolds CPA, CFP®

Tom Reynolds, CPA 

Robert T. Martin, CFA, CFP®

Gordon Shearer Jr., CFP® 

Jeff Hilliard, CFP®, CRPC®

Joe McCaffrey, CFP® 

Phillip Tompkins 


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