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Week in Review: Feb.20.2023 - Feb.24.2023

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February 27, 2023

Market Recap


The S&P 500 extended its losing streak to a third consecutive week as heightened concerns surrounding the Federal Reserve's campaign against inflation and its effect on the economy weighed on Wall Street.

The benchmark index closed 2.7% lower at 3,970.04 from last week's close of 4,079.09 with all but the energy sector ending the week in the red. This was the first time since December the index has closed lower for three straight weeks.

The holiday-shortened week kicked off with a sales warning from Home Depot (HD) in which the home improvement retailer said comparable sales growth would be flat in 2023. The stock sold off sharply, dragging down the consumer discretionary sector.

Weighed down further by disappointing Q4 sales from Domino's Pizza (DPZ) and production issues with General Motors (GM), the consumer discretionary sector was down 4.44% last week, making it the worst-performing sector within the S&P.

Financial stocks continued to face headwinds as lingering concerns of a Fed-fueled recession coupled with the likelihood that the interest rate premium for banking stocks from higher interest rates is already priced in drove the entire sector down 2% for the week.

Led by losses in Boeing (BA) and Southwest Airlines (LUV), industrials were down 2.7% for the week, while the utility sector closed the week with a loss of 2.8% as a consequence of the sector's sensitivity to higher borrowing costs.

Fueled by growth in its data center business, shares of Nvidia (NVDA) rallied 14% on Thursday and closed the week with an 8.9% gain. That wasn't enough to offset losses in shares of Intel (INTC) after the chipmaker cut its dividend and Keysight Technologies (KEYS) which spooked investors with its lackluster Q2 revenue guidance. Accordingly, the technology sector was down 2.7% from the prior week's close.

Better-than-expected earnings from Coterra Energy (CTRA) and Diamondback Energy (FANG) helped prop up the energy sector, which finished out the week up 0.2%, and the only sector to close in positive territory.

Last week's economic data was eclipsed by the minutes from the February Federal Open Market Committee meeting that showed the committee remained committed to higher interest rates to curb inflation. Wall Street is expecting another 25-basis-point rate hike in March, May and June, which would push the terminal rate as high as 5.5%.

Next week's heavy economic calendar includes pending home sales Monday, home pricesand consumer confidence Tuesday, the purchasing manager's and ISM manufacturingindices Wednesday, non-farm productivity on Thursday, and the services sector PMIsFriday.

On the earnings front, focus shifts to the retail sector with results from AutoZone (AZO), Advance Auto (AAP), Target (TGT), Urban Outfitters (URBN), Lowe's (LOW), Kohl's (KSS), Best Buy (BBY) and Macy's (M). Tech heavy-hitters Salesforce (CRM), Dell (DELL) and Broadcom (AVGO) also report next week.

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