Stocks enjoyed strong gains last week after an uneven start to the year. The S&P 500 rose 2.9% and was led by the Energy sector. International markets lagged the U.S. but still gained 2.0%.
Yields fell across the curve on the back of cooler inflation data and dovish comments from Federal Reserve members. The 10-year yield briefly touched 4.89% on Tuesday before finishing the week at 4.61%; the 2-year yield closed at 4.27%.
Inflation data was in focus as the Core Consumer Price Index rose 3.2%, softer than expectations. Meanwhile, major banks kicked off earnings season with generally strong results
A look ahead
Corporate earnings will be in the spotlight with 40 companies in the S&P 500 set to report Q4 results. Analysts are forecasting year-over-year (YoY) earnings growth of 12.5% for the index, which would be the strongest rate since Q4 2021.
In a relatively light week for economic data, investors will key on existing home sales, which are expected to increase YoY for the 3rd straight month after 37 straight months of declines.
Economic releases: Leading Indicators, U. Mich. Consumer Sentiment, Existing Home Sales.
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