LSA Connect

Economic Update 3-02-2026

Economic data for the week included a stronger-than-expected report for producer price inflation, moderate gains in housing prices and construction spending, as well as some improvement in consumer confidence.

Equities were mixed, showing weakness in the U.S., but strength internationally. Bonds gained as investors moved away from risk. Commodities also gained, continuing recent strong trends in metals.

U.S. stocks fell back last week, as tariff/trade announcements from the prior weekend and continued concerns over the impact of artificial intelligence on certain sectors and particular high profile companies continued to weigh on investor minds. By sector, defensives gained on a negative week, as would be expected, led by utilities, health care and consumer staples, all up over 2%, as well as energy, which benefited from recent geopolitical concerns about oil prices. Lagging were cyclicals financials and technology down by roughly -2% each. In tech, NVDIA’s earnings beat consensus, but not by enough to turn sentiment higher, as the bar had been set fairly high. An unmistakable trend has been a shift in investor sentiment away from AI-related tech software toward physical assets, and ‘value’ stocks, some of which has been related to the massive data center infrastructure build-out, but also strong materials prices, and general anticipated positive cyclical effects from fiscal/tax measures.

Economic Update 2-17-2026

Economic data for the week included a strong January jobs report, albeit with methodological nuances, flattish retail sales, and weaker weather-impacted existing home sales. Consumer inflation came in cooler than expected, mostly due to lower energy prices.

Equities were mixed, with tech-related declines in the U.S. offset a bit by continued strength in international stocks. Bonds fared positively from movement away from risk and a weaker U.S. dollar. Commodities were mixed, with gold strength and energy weakness.

U.S. stocks fell back again last week, as uncertainty over AI’s impact on software company revenues over time continued to weigh on sentiment for technology-related stocks, in a pattern of ‘sell now’ and ‘figure out the details’ later, not uncommon in equities. By Wed., a stronger-than-expected jobs report was taken favorably by markets, in that the economy remained in decent shape, until the realization of perhaps fewer Fed interest rate cuts, which dampened the mood a bit. Friday’s CPI report coming in cooler than expected helped the mood slightly, but not outweighing the AI concerns. By sector, utilities saw a sharp gain of over 7% as interest rates fell and investors sought save havens, followed by materials and energy. Financials declined by -5%, particularly in the areas of insurance and asset management, also thought to be under threat of being undermined by AI tools. Real estate fared positively, up a few percent, along with lower interest rates.

Economic Update 2-9-2026

Economic data for the week included ISM manufacturing moving back into expansion, ISM services staying in expansion, some improvement in consumer sentiment, but weaker job openings and claims data. Another partial government shutdown paused the release of the January employment situation report until this coming week.

Equities saw a volatile week, but ended mixed, with gains in U.S. value and small cap, as well as international. Bonds saw gains across the board along with the stock market’s volatility and lower rates. Commodities saw gains in precious metals but declines elsewhere.

U.S. stocks were mixed last week, with strong returns from value, where the S&P 500 Value Index gained over 2%, while growth stocks lost an equivalent amount. Sector results reflected that, with gains of 4-6% in consumer staples, industrials, and energy; these offset negative returns 4-5% returns in communications (Meta and Alphabet) and consumer discretionary (Amazon and Booking Holdings). As a sub-group, software suffered its worst week in about four years, down close to double-digits.

Economic Update 1-20-2026

Economic data included consumer price inflation coming in steady, but still elevated, as did producer price inflation. Industrial production and retail sales came in positively. New and existing home sales rose, but homebuilder sentiment continued to weaken. Jobless claims fell, reflecting further normalization after year-end.

Equities fared positively around the world last week, with small cap and international outgaining U.S. core large cap. Bonds were largely down as interest rates ticked higher as inflation remained sticky. Commodities were mixed, with precious metals continuing to lead due to geopolitical considerations.

U.S. stocks fell back on net for the week, with better results from value and small cap stocks, which outperformed large cap growth. By sector, gains were strongest in consumer staples, industrials (defense stocks), and energy, while communications (Meta mostly) and financials (large banks) pulled back by a few percent. Real estate also gained several percent, despite a rise in interest rates across the yield curve.