Equity Markets Closed Lower Last Week

The markets ended the week higher, despite falling retail sales, accelerating inflation data, and ever-changing tariff proposals from the administration. Each of the major benchmark indexes gained ground, led by the Global Dow and the NASDAQ. Information technology and consumer staples led the market sectors, while consumer discretionary, health care and financials underperformed. Crude oil prices trended lower, as did the dollar. Gold prices eked out a weekly gain.

Consumer Price Index Accelerated in January

The Consumer Price Index rose 0.5% in January, the largest one-month increase since August 2023. The January advance followed monthly advances of 0.4% in December and 0.3% in November. Excluding food and energy (core prices), prices rose 0.4% last month. Shelter costs rose 0.4% in January, accounting for nearly 30% of the monthly all-items increase. Energy prices rose 1.1% over the month, as gasoline prices increased 1.8%. Prices for food also increased in January, rising 0.4%. Over the last 12 months, consumer prices increased 3.0%, after rising 2.9% over the 12 months ending December. Core prices rose 3.3% over the last 12 months. Over the same period, energy prices advanced 1.0% and prices for food increased 2.5%. While consumer prices have been ticking higher over the past several months, the January data offered more stark evidence that inflation is on the rise again, even before newly proposed tariffs influenced consumer prices.

Eye on the Week Ahead

The housing sector is prevalent this week with the latest data on housing starts and existing home sales for January. December saw both housing starts and completions surge, while the number of issued building permits lagged. Sales of existing homes increased in December and were up over 9.0% from a year earlier.