Edward Jones - Financial Advisor: Ryan Thomas

Pressures on the banking sector were front and center last week, with headlines taking markets on a roller coaster ride. Though anxieties could persist for a while, we don’t think they'll morph into a structural crisis. Nevertheless, the pressure on the sector serves as a reminder that restrictive policy tends to uncover vulnerabilities that are lurking in the financial system.

At the anniversary of the Fed's most aggressive rate-hiking campaign in four decades, the recent bank troubles could potentially mark a turning point in monetary policy. In our weekly market update, we offer some perspective on what last week's developments mean for interest rates, the economy and the markets.

Weekly market wrap A summary of last week's market highlights and economic news.

Renewed stock market swings continued last week in response to the latest developments in the outlook for Fed policy and employment conditions. A two-day congressional testimony from Fed Chair Jerome Powell dampened the market's mood as he emphasized the Fed's commitment to fighting inflation, signaling additional rate hikes ahead. The February jobs report grabbed the spotlight by week's end as markets looked to the latest employment trends for clues on the health of the economy.

There's plenty of information to digest, but it's important for investors to keep an eye on the broader view. While this current bear market has lasted longer than average, stocks are holding on to solid gains so far in 2023. We think the maturity of this bear market should also be viewed as progress toward what we expect will be a more sustainable recovery as we progress through the year. In our latest Weekly Market Wrap, we take a look at the current investment conditions, how they compare to history and what all of this tells us about the potential road ahead.

Weekly market wrap A summary of last week's market highlights and economic news.

Family conversations about finances are important to foster positive financial habits in kids. Fortunately, there tend to be lots of natural opportunities in life to discuss certain topics with your family. Take a look here for some age-appropriate ideas to work on building financial skills.

Family Conversations about Money Learn about topics, strategies, and best practices for having family conversations about money. From Edward Jones and EVERFI

After a strong start to the year, market volatility seems to have returned. While we would expect market volatility to continue near-term, we are also watching for key inflection points that may indicate the early innings of a more sustainable rally ahead. We highlight three potential conditions that we believe would support better market returns longer term: 1) inflation moving lower, 2) the Federal Reserve pausing its rate-hiking cycle, and 3) earnings revisions bottoming.

Weekly market wrap A summary of last week's market highlights and economic news.

After a strong and steady rally to start 2023, markets have seen a return of volatility of late, including a decline last week spurred by renewed concerns over further interest rate hikes from the Fed. This is not a new issue, but it has prompted markets to reevaluate expectations for the economy ahead. No two cycles are exactly the same, but we do think there are noteworthy similarities between current conditions and those in the 2001 bear market.

In our latest Weekly Market Wrap, we discuss the parallels with the past and what they suggest about what might lay ahead for investors.

Weekly market wrap A summary of last week's market highlights and economic news.

Last week's jump in U.S. retail sales together with January's blowout jobs report paint the picture of an exceptionally strong economy. This backdrop is hardly what one would expect from an economy that is still navigating inflationary pressures and the most aggressive central bank tightening cycle in four decades. Which begs the question, does the Fed need to do more? The bond market appears to think so, but equities remain unfazed.

Given what we learned last week, we share our thoughts on how the market narrative might evolve and how some of the existing market tensions might be resolved.

• The market rally this year has been impressive. Most asset classes have participated, and the laggards of last year have particularly outperformed. These outperformers include technology, small-cap stocks, international equities, and even more speculative parts of the market.
• However, last week some uncertainty and volatility returned to markets. The S&P 500 was down over 1.0% on the week, its worst week of the year thus far. Treasury bond yields also moved higher, while oil prices climbed as well. Markets may be now approaching more of a fork in the road – does the rally continue or does it fade from here?

Weekly market wrap A summary of last week's market highlights and economic news.

After a year in which nothing seemed to go investors' way, 2023 has, so far, been the polar opposite. Stocks are up handsomely while interest rates are down markedly. Last week brought a heavy dose of fresh information on each of the three central drivers for the market this year: the Fed, the jobs market and corporate profits. The outcome was another up week for the market, and while this recent rally is both welcome and reasonable, we don't think it should be viewed as confirmation that the coast is clear. In our latest Weekly Market Wrap, we share our thoughts on several popular market takes and what last week tells us about the path ahead.

Weekly market wrap A summary of last week's market highlights and economic news.

Markets are off to a good start in 2023, but this comes on the heels of an extremely challenging 2022, in which both stocks and bonds logged declines for the year, something that hasn't occurred since 1994. There's good news for investors, however, as history shows down years for the stock market have typically been followed by healthy gains. While the clouds have not completely cleared, we think there are reasons to be optimistic. In our latest Weekly Market Wrap, we examine what often happens after down years for the market and what it could mean for the year ahead.

Weekly market wrap A summary of last week's market highlights and economic news.

After a positive start to the year in markets – in part driven by a better inflation narrative in the U.S. and globally – this past week investor sentiment seemed to turn somewhat lower. Equity markets turned negative mid-week after economic data pointed to a weaker U.S. consumer and manufacturing sector. Take a closer look at the rest of our key takeaways.

Weekly market wrap A summary of last week's market highlights and economic news.

The U.S. headline CPI eased further, with December marking the smallest annual increase since October 2021. Paired with the November and October data, core inflation has now slowed for three consecutive months, suggesting that a pattern of disinflation is emerging. Price pressures remain too high for the Fed's comfort, but the gradual cooling likely sets the stage for the Fed to downshift further in the pace of rate hikes. Read our latest weekly market update for thoughts on what the recent data could mean for the markets and investment strategy.

Weekly market wrap A summary of last week's market highlights and economic news.

While inflation, rate hikes and geopolitical uncertainties have posed challenges for the market, the labor market has remained a bright spot. This was highlighted by the most recent payroll figures which showed that employment conditions remain quite resilient. Markets, however, took the news on the chin under the assumption that ongoing strength in the employment picture could threaten the downward path for inflation. In our latest Weekly Market Wrap, we note three key takeaways from the latest jobs report and what this may mean for the financial markets in 2023.

Weekly market wrap A summary of last week's market highlights and economic news.