The end of last week was a classic example of being rewarded for time in the markets and not caving in to emotions or market timing. Are there still concerns? Sure. Are markets being pushed higher by a small group of stocks? Yes!

Remember the “Soup Nazi” from Seinfeld? Well, Federal Reserve Chairman Jerome Powell channeled his inner “Soup Nazi” with an emphatic “No rate cuts for you” last Wednesday.

The consumer hasn’t gotten tired of spending — at least not yet. December retail sales, released last Wednesday, were strong and easily exceeded expectations. The latest consumer sentiment number also came out last week, jumping to its highest level in nearly three years.

Christmas came early this year for investors. Colloquially known as a “Santa Claus rally,” the market experienced an upward bounce in the latter half of November. On the equities side, the S&P 500 and Nasdaq saw their best monthly gains (8.9% and 10.7%) since July 2020. Over on the bonds side, U.S. Treasury yields continued to drop and the bond market had its best monthly gain in nearly 40 years.

Stop, skip — or something else? As expected, the Federal Reserve left interest rates alone last week after raising rates at its prior 10 meetings.

Last week was a quiet one for trading, and markets seemed to be holding their breath in the days leading up to this week’s Federal Reserve meeting. Although it wasn’t a stellar performance week

Ever heard of a “ Jacob’s ladder” ”? It’s a notoriously difficult sailing ship apparatus that requires finesse to use effectively. One small shift in body weight, and you get all twisted around (if you don’t fall completely off). Federal Reserve Chairman Jerome Powell seems to be grappling with his own Jacob’s ladder, balancing between raising rates to tame inflation and supporting banks under increasing pressure due to the Fed’s rate hikes.

To say lots has been happening in the U.S. banking system over the past two weeks is quite the understatement. First Silicon Valley Bank and Signature Bank were closed by regulators. Then fissures appeared over at Credit Suisse, which reported in February that clients pulled $119 billion out in the fourth quarter and that in 2022 the bank realized its biggest annual loss since 2009.

Remember the phrase, “March comes in like a lion and goes out like a lamb?” As we closed out a turbulent February, where we gave back almost half of our sparkling January returns, March started much like February ended.

Markets had their best January since 2019, and the upward momentum has spilled into a strong start to February thanks to the dovish Fed last week.Markets grappled with this information while also keeping a close eye on the release of the Fed minutes, which showed the Fed was nowhere close to considering a pause, let alone cuts.

Markets had their best January since 2019, and the upward momentum has spilled into a strong start to February thanks to the dovish Fed last week.

Overall, the U.S. economy grew at an annual rate of 2.1% in 2022. It’s a pretty modest number, but if you consider that growth was negative in the first six months, the fact that we managed to get above 2% for the year is pretty remarkable.

Markets started the week with jitters as the 10-year bond rose above 3%, and the specter of a different narrative than what markets were expecting began to emerge. Those jitters seemed to become full-blown disappointment following Chairman Powell’s comments, and markets experienced large drops for the week.