Stocks End Lower, Capping Off A Disappointing Month  Image: Bigstock Stocks closed lower yesterday, except for the small-cap Russell 2000 which eked out a small gain. Inflation concerns continue. But we had a plethora of reports to focus on yesterday. Retail Inventories for January were up 0.3% m/m. December was revised lower from 0.5% to 0.4%. But y/y they were up 12%. Wholesale Inventories for January, however, were down -0.4% vs. views for 0.0%. But on a y/y basis they were up 15.9%. The Case-Shiller Home Price Index (unadjusted) was down -0.9% m/m. That compares to last month's -0.8% pace. On a y/y basis it's up 4.6%. And that compares to last month's 6.8% print. The Chicago PMI slipped to 43.6 vs. last month's 44.3 and the consensus for 45.0. The Richmond Fed Manufacturing Index dipped to -16 from last month's -11 and estimates for -5. And Consumer Confidence fell to 102.9. A fine reading, but down from last month's downwardly revised 106.0 and the consensus for 108.5. The mixed, to less than positive reports, weighed on stocks yesterday, cutting their intraday rally short and then some. Today we'll get another look at the economy with MBA Mortgage Applications, the PMI Manufacturing report, the ISM Manufacturing Index, and Construction Spending. Yesterday wrapped up a tough month. February saw the Dow down by -4.19%; the S&P down -2.61%; the Nasdaq down by -1.11%; and the Russell 2000 down by -1.81%. For the year, it's a slightly mixed bag, but mostly higher. The Dow is off by -1.48%. But the S&P is up 3.40%; the Nasdaq is up 9.45%; and the Russell 2000 is up 7.71%. Inflation and interest rates will continue to be the main focus. And what impact that could have on the economy. Is the economy strong enough to ease a bit more in an effort to bring down inflation, but remain strong enough to avoid a contraction (recession)? The tea leaves at the moment say yes. But the market generally looks 6 months ahead. Hence the uncertainty. For now, investors would take 2023 over 2022 any day. Especially since we're closer to the end of the rate hike cycle than not. Let's see if the market can get off to a better start for March. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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