This Weekly Financial Markets Update reviews the top market headlines: Federal Reserve Holds Rates Steady, Jobs Jump in January, Consumer Optimism Rises in January

Top Three Market Headlines

Federal Reserve Holds Rates Steady: The Federal Reserve's policy-setting committee voted last week to maintain the federal funds interest rate target range at 5.25% to 5.50%. This was the fourth straight meeting at which the Fed held the target steady after having raised it to this level in July of last year. In terms of forward guidance, Fed Chair Jerome Powell stated that the central bank does not expect to reduce the target range "until it has gained greater confidence that inflation is moving sustainable to 2%." While acknowledging that inflation readings moderated over the second half of 2023, Mr. Powell cautioned that "ongoing progress toward our 2 percent inflation objective is not assured."

Jobs Jump in January: The Labor Department reported last week that employers in the U.S. added 353,000 jobs in January, the highest monthly total in 12 months. The previously-reported estimated job additions for November and December were also revised higher by a combined total of 126,000. Industries seeing the most job gains in December were professional and business services, health care, and retail. The unemployment rate held steady at 3.7%, while average hourly wages rose at a 4.5% annual clip, the fastest pace in four months.

Consumer Optimism Rises in January: Consumers' outlook for the economy improved in January, according to two widely-followed surveys released last week. The Index of Consumer Sentiment published by the University of Michigan registered 79.0 in January, up 13% from December and the fourth straight monthly rise. While this was the highest level since July 2021, it nonetheless remained below the index's 30-year average of 86.8. Related, the Conference Board's Consumer Confidence Index rose in January to 114.8, the third straight monthly increase and the highest reading since December 2021. Factors supporting the rising optimism across the surveys included improved outlooks for inflation, business conditions, and the labor market.

As of February 05, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.92% 1.91% 1.91% 13.76%
S&P 500 1.41% 4.06% 4.06% 20.59%
Russell 2000 -0.77% -3.12% -3.12% -0.36%
MSCI EAFE 0.02% -0.54% -0.54% 7.08%
MSCI Emerging Markets 0.32% -3.43% -3.43% -3.02%
FTSE NAREIT -0.62% -3.54% -3.54% -3.60%
Bloomberg Commodity -2.04% -1.50% -1.50% -6.88%
Barclays U.S. Aggregate 0.65% -0.66% -0.66% 0.95%