Russia-Ukraine war news dominated headlines this week contributing to market fluctuations. The S&P 500 is up 3.85% this week after sharp moves down last week. The largest contributor to performance was a 7.97% increase in the Energy sector.

There was a 0.1% increase in personal income in January. The increase was led by higher compensation in the month, however, was partially offset by a decrease in government social benefits.

Personal Consumption Expenditure (PCE) was up 6.1%. This increase was led by a sharp rise in the price of energy of 25.9%. Excluding energy and food, PCE was up 5.2%. The readings were very much in line with the expectations. Over the month, headline PCE was up 0.6% and core PCS was up 0.5%. PCE is the primary inflation measure used by the Fed due to its lower volatility relative to the consumer price index.

The personal savings rate is down to 2013 levels after sharp increases in 2020. January’s personal savings rate of 6.4% is down from the peak of 16.3%.

Pending home sales were down for the third consecutive month. The decline of 5.7% was attributed to low home inventory. New home sales declined from the previous month’s 839,000 to 801,000. The 801,000 new homes sold was in line with the expectation of 800,000. The number of building permits issued was down a little to 1.895 million. Analysts have estimated the number of permits would be similar to the number issued in December.

Durable goods orders increased by 1.6% in January from December. The increase comes after a December decrease. Growth was led by orders for machinery.

The final results of the Michigan Sentiment Indicator for February was a bit more positive than initially thought. The revision has consumer sentiment for the month at 62.8. This is an increase from the initial estimate of 61.7. Despite the upward revision, the index is still at its lowest level in the last decade. The data for the report was collected before the invasion of Ukraine by Russia.

Oil prices continued their increase this week. WTI Crude oil ended Wednesday at 102.37. This is an increase of 16% over the week.

Source: BTC Capital Management, Bloomberg LP, Ibbotson Associates, FactSet, Refinitiv.
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