The Israelites, however, were unfaithful regarding the things set apart for destruction. Achan son of Carmi, son of Zabdi, son of Zerah, of the tribe of Judah, took some of what was set apart, and the Lord’s anger burned against the Israelites.
Joshua 7:1 (CSB)
The Canaanite city of Ai should have been an easy enemy for the Israelites to overcome. Reconnaissance reports indicated that they didn’t even need to deploy the entire army; just a few thousand would do. In the end, though, that tiny town completely routed them, and three dozen of their soldiers lost their lives.
The reason for their defeat was not one of tactics but one of obedience. The Lord had previously commanded them not to plunder the city of Jericho for their own benefit. Yet Achan secretly did just that. He came upon some gold, silver and a beautiful cloak and took them for himself, hiding them underneath his tent.
As a result, the Lord’s anger burned against the people, and he allowed Ai to overcome them at the cost of the lives of 36 Israelites. One man sinned, yet the entire nation paid the price for it.
We may wish that the consequences of sin were always confined just to the one who committed it, but they’re not. We will all be judged individually for what we do in this life (2 Corinthians 5:10), but the effects of our sin ripple outward and hurt those around us. Sin is like venom; its effects never stay in one area but spread through the whole body, bringing devastation and rot. It's no wonder the Apostle Paul told the Corinthian church to “Remove the evil person from among you.” 1 Corinthians 5:13 (CSB)
As Christians, we need to remember that personal sins never remain just personal and always lead to pain for others. May we be quick to repent of all sin, even those we think are private.
The S&P 500® Index was down -0.4% for the week, with higher-than-expected inflation data on Tuesday and Friday weighing on risk sentiment. However, there were some bright spots at the sector level, with returns broadening beyond growth stocks, and the equally weighted iteration of the Index was up 0.7%. Seven sectors posted positive returns, including the more cyclically sensitive Energy and Materials sectors. Still, the more interest rate sensitive parts of the market, Information Technology and Communication Services, dragged the broad Index into negative return territory.
Oil futures were up for the week, with WTI and Brent increasing to $78.03 and $84.47 $/bbl, respectively. Price action for the week incorporated monthly oil market reports out of OPEC/IEA, a bearish U.S. weekly crude stockpile build-up, a continuation of historically lower refinery utilization, apparent unsuccessful Israeli-Hamas ceasefire talks, and ongoing attacks in the Red Sea.
Treasuries were weaker, and yields were higher as investors responded to hot inflation data prints. The curve flattened slightly, and 2-year yields remained higher than 10-year yields by 0.38%. The curve has normalized significantly compared to last summer, when the inversion at its deepest level was greater than 1.0%.
Credit spreads tightened for the week despite market turbulence, with yields on investment-grade-rated corporate debt surpassing equivalent Treasury yields by a paltry 86 basis points. High-yield bonds offered 314 basis points of premium at the weekend.
European equities ended the week higher, continuing to take encouragement from the pace of disinflation, mostly disregarding the hotter-than-expected U.S. inflation prints. Central bank officials from the Bank of England and European Central Bank have largely noted that the disinflation process remains on track, but they remain cautious.
Japanese equities were again the standout performer in developed international markets, with most indices closing near multi-decade highs despite a surprise fall into a technical recession (two consecutive quarters of GDP contraction).
Mainland China markets remain closed for the Lunar New Year, but a rebound in travel during the holiday hints at a resurgence in consumer spending. Over 61 million rail trips were recorded in the first six days of the holiday, the highest in the last five years and 61% above last year's break.
Inflation data prints disappointed this week with the January Consumer Price Index (CPI), up 0.4% month-over-month, and the Producer Price Index (PPI), up 0.5% month-over-month, coming in hotter than expected, reminding investors that despite recent cooling, the battle for 2% inflation is not finished. The reports caused investors to lower their expectations for potential rate cuts considerably. Futures markets now price almost no chance of a March cut and an ~80% likelihood that the Fed’s first move will come in June.
Retail sales also disappointed to the downside, falling -0.8% over the month, the largest drop in almost a year. However, the January reading can be more sensitive to seasonal factors, with colder weather and reduced spending post-holidays weighing on purchasing.
Despite the recent uptick in inflation, the U.S. economy remains resilient. Initial jobless claims came in below consensus estimates, and the Atlanta Fed GDPNow model projects nearly 3% growth for the first quarter of 2024.
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