Markets moved broadly higher in February as AI-focused companies continued to fuel the rally.
A slew of robust earnings reports, led by some large tech companies, supported investor sentiment throughout the month. With 73% of S&P 500 companies having reported a positive earnings surprise, the strong data helped offset some uncertainty around the timing of a potential Fed rate cut.
Unlike January, market participation was more widespread in February, with larger and smaller companies climbing higher. The small-cap Russell 2000 led the way, gaining 5.52% after faltering to start the year. Large-cap US indices weren’t far behind, with the Nasdaq 100, S&P 500 and Dow Jones Industrial Average gaining 5.29%, 5.10%, and 2.22% respectively.
Overseas, international markets trailed the US, though still ended the month with respectable gains. Developed international stocks rose 2.74% while emerging markets increased 3.48%. Despite the more modest returns, there was still a noteworthy event to celebrate – Japan’s Nikkei 225 Index reached a new record high for the first time since 1989.
There was no official meeting scheduled in February, but Fed members pushed back against a near-term start to interest rate cuts during various press conferences. The statements caused investors to readjust expectations for an initial rate cut, with June now sitting as the front runner for a potential first move. With rate cut expectations being pushed further into the year, the 10-year treasury yield rose from 3.99% to 4.25%, causing aggregate US bonds to fall 1.41%. Despite the ongoing headwinds, bond yields remain relatively favorable compared to just a couple years ago.
While markets have continued to trend higher, it raises the question of whether the recent rally is overextended. With strong earnings supporting the fundamentals, and rate cuts still on the horizon, data suggests there could be further upside. However, it’s not unreasonable to expect some volatility along the way. Markets don’t move in a straight line. This is why it’s important to have a defined investment strategy and plan, to provide guidance throughout the inevitable uncertainties along the way.
Made in… Mexico?
According to data from the Census Bureau, Mexico surpassed China as the top exporter to the US for the first time in 20 years.
The shift represents both a triumph for Mexico and a flop for China.
Mexico has become a major auto producer, increasing vehicle exports substantially. Foreign investments in the country also rose 21% in 2023.
China, on the other hand, has been hit by tariffs and technology regulations, making imports from the country pricier.
The US trade deficit with China has narrowed significantly, dropping 20% last year and shrinking to its lowest level since 2010.
To adapt to this new trend, Chinese companies have started pouring money into other countries (like Mexico) in attempt to sidestep tariffs.
If you liked it then you should’ve put a ring on it.
Well if you like your health, Samsung is suggesting to put a Galaxy Ring on your finger.
Announcing its first-ever smart ring, the company said it’s hoping to help people track sleep and activity patterns. It may also explore adding contactless payment features in the future.
Its first-generation ring will specifically measure heart rate, breathing, and movement, with ongoing research to develop noninvasive glucose monitoring and blood pressure sensing.
While many smartwatches already have the ability to track these lifestyle metrics, Samsung is betting that users might be more comfortable sleeping with a smaller wearable device.
The electronic ring space is currently dominated by smaller niche startups, but analysts are expecting the competition to heat up if Samsung’s launch is successful.
Broad Market Returns
| Asset Class | 1 Month | 3 Month | YTD | 1 Year |
| S&P 500 (VOO) | 5.21% | 11.79% | 6.90% | 30.30% |
| NASDAQ (QQQ) | 5.28% | 13.19% | 7.20% | 50.58% |
| Large Cap Growth (VUG) | 7.07% | 14.10% | 9.38% | 47.59% |
| Large Cap Value (VTV) | 3.34% | 9.54% | 4.23% | 14.56% |
| Small Cap Growth (VBK) | 8.01% | 16.30% | 4.88% | 16.77% |
| Small Cap Value (VBR) | 4.05% | 11.44% | 1.46% | 10.39% |
| Developed International (VEA) | 2.74% | 7.31% | 1.63% | 13.88% |
| Emerging Markets (VWO) | 3.48% | 3.13% | -0.19% | 7.82% |
| REITs (VNQ) | 1.98% | 5.97% | -3.18% | 4.20% |
| Aggregate Bonds (BND) | -1.36% | 1.98% | -1.52% | 3.47% |
| Corporate Bonds (VCIT) | -1.44% | 2.57% | -1.49% | 6.42% |
| High Yield Bonds (JNK) | 0.30% | 3.82% | 0.45% | 10.64% |
| Long Term Treasuries (VGLT) | -2.33% | 3.81% | -4.07% | -2.94% |
| International Bonds (BNDX) | -0.54% | 2.06% | -1.11% | 6.68% |
Market Health Indicator
The Market Health Indicator (MHI) measures market health on a scale of 0 – 100, analyzing various market segments such as economics, technicals, and volatility. Higher scores indicate healthier market conditions.
Fun Facts
- The $100 bill is the most common US paper currency, partially thanks to a sharp decline in cash payment transactions.
- Weighing in at 0.05 to 0.07 ounces, the bumblebee bat is the world’s smallest mammal.
- Super Bowls make up nine of the 10 most watched television broadcasts in the US, though the first moon landing still holds the top spot.
- Don’t forget to set your clocks an hour ahead. Daylight saving time will begin on Sunday, March 10.
– The Aspire Wealth Team
Weekly Wake-Up
