Today's Scoop:

Hey friends, welcome to 2023!  Here's what you need to know today...

1. 2022 was the worst year for the stock market since 2008.

2. Inflation keeps cooling around the world.

3. US manufacturing is showing signs of trouble.

S&P 500: 3,824.141Mo: -4% | 1Yr: -20% | 5Yr: +39%

The market failed on its positive resolutions today, carrying the same negative energy over from last year. 2022 was the worst year for the stock market since the 2008 Great Financial Crisis. The S&P 500 fell 19% for the year. 

Inflation keeps showing signs of cooling around the world. Data in Europe pointed to a slower rise in living costs from Spain to Germany, particularly due to a fall in energy prices. Europe's been dealing with much worse inflation than us.

US manufacturing is showing signs of trouble. The S&P Global U.S. Manufacturing Purchasing Managers’ Index recorded the steepest drop since May 2020 last month, demonstrating a slowdown in business activity.

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• Chemours director resigns over 'woke culture'

• Tesla doesn't deliver on its promises

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Inflation affects corporate profits

The stock market works in anticipation of what's going to happen. Investors choose to own or not own a piece of a company to earn a share of its future growth and profits. Investors often sell stocks when worried about inflation because it can negatively affect corporate profits.

As the costs of materials, labor, and other supplies increase, corporations can pass those higher costs on to the consumer by raising the price of their goods or services. Eventually, the consumer can't handle the price increases and stops buying as much. Corporate profits start to decline as costs keep increasing, but revenue slows.

We've already seen the inflation passed on to the consumer, and now investors are watching to see whether overall consumer spending declines.