Financial Market Update
Welcome to the StrategicPoint Financial Market Update — a market and economic overview of what occurred last week and what’s up for this week. Please find our market commentary and most recent Blog posts in our StrategicPoint of View®.
Stocks were relatively listless last week, with only the Russell 2000 posting a gain of 0.6%. The Nasdaq, the Dow, and the Global Dow fell between 0.2% and 0.4%, while the S&P 500 was nearly flat. Energy stocks were among the worst performing, with crude oil prices posting their poorest week in about a month. Gold prices slipped below $2,000.00 per ounce. The dollar edged higher, while 10-year Treasury yields climbed minimally. The start of corporate earnings season has been mixed at best, prompting investors to pause until this week when the initial estimate of first-quarter gross domestic product and the latest Personal Consumption Expenditures Price Index are released.
Wall Street opened last week on a positive note, pushed higher following a late-day market rally. The small caps of the Russell 2000 advanced 1.2% to lead the benchmark indexes listed here, with the Dow, the S&P 500, and the Nasdaq each gaining around 0.3%. The Global Dow broke even by the close of trading. Crude oil prices fell 1.9% to $80.98 per barrel on signs of waning demand. Ten-year Treasury yields added 6.9 basis points to close at 3.59%. The dollar rose higher, while gold prices slid 0.4% to $2,007.70 per ounce. Investors will be interested in corporate earnings season, which is picking up steam, with bank and financial earnings upcoming.
Stocks rode a roller coaster last Tuesday, ultimately ending the session about where they began. The S&P 500 (0.1%) and the Global Dow (0.5%) eked out gains, while the Russell 2000 fell 0.4%. The Dow and the Nasdaq ended the day flat. Crude oil prices dipped to $80.85 per barrel. Ten-year Treasury yields slipped to 3.57%. The dollar declined, while gold prices advanced. Throughout the day, investors tried to assess a mixed bag of bank earnings reports against hawkish comments from Federal Reserve officials that implied more interest-rate hikes.
Last Wednesday saw stocks close marginally lower, with only the Russell 2000 (0.2%) gaining ground among the benchmark indexes listed here. The Nasdaq and the S&P 500 were flat, while the Dow and the Global Dow slid 0.2%. Gold prices settled 0.6% lower, while the dollar edged higher. Crude oil prices declined to $78.99 per barrel, closing below the $80.00 per barrel mark for the first time since April 10. The yield on 10-year Treasuries inched up 3.0 basis points to 3.60%.
Disappointing corporate earnings sent stocks lower last Thursday as investors worried about a softening economy. The Nasdaq slid 0.8%, the S&P 500 and the Global Dow dropped -0.6%, the Russell 2000 fell 0.5%, and the Dow lost 0.3%. Bond prices rose, pulling yields lower, with 10-year Treasury yields falling to 3.54%. Crude oil prices declined for the fourth straight day, closing at about $77.29 per barrel. The dollar lost value, while gold prices increased nearly 0.5% to $2,017.20 per ounce.
Stocks edged higher last Friday to close out a generally disappointing week. None of the benchmark indexes listed here gained more than 0.1%, but only the Global Dow trended lower. Ten-year Treasury yields rose 2.5 basis points to close at 3.57%. Crude oil prices rose $0.40 per barrel. The dollar and gold prices slid lower.
S&P 500: 4,133 (down 0.10% for the week and up 7.66% for the year)
NASDAQ: 12,072 (down 0.42% for the week and up 15.34% for the year)
Dow: 33,808 (down 0.23% for the week and up 2% for the year)
US Treasury 10yr: 3.57% (from 3.52% last week)
Crude Oil: $77.76 (from $82.64 last week)
Gold: $1,993.70 (from $2,019 last week)
USD/Euro: $1.0992 (from $1.0994 last week)
• The number of building permits for residential construction declined 8.8% in March. Residential building permits are down 24.8% since March 2022. Single-family home permits rose 4.1% last month. Housing starts fell 0.8% in March and 17.2% from a year ago. Housing starts for single-family homes increased 2.7% in March. Housing completions dipped 0.6% in March, although single-family home completions advanced 2.4%. A limited supply of existing homes for sale has likely driven a rise in single-family construction.
• Existing home sales fell 2.4% in March and are down 22.0% since March 2022. Unsold inventory in March sat at a 2.6 month supply, unchanged from February. The median sales price for existing homes was $375,700 in March, up 3.3% from the previous month but 0.9% under the sales price from a year ago. Sales of existing single-family homes declined 2.7% in March and 21.1% from a year ago. Available inventory of single-family homes was at a 2.6-month supply, nearly the same as in February (2.5 months). The median sales price in March for existing single-family homes was $380,000, 3.2% higher than the February price, but 1.4% under the March 2022 price.
• The national average retail price for regular gasoline was $3.663 per gallon on April 17, $0.067 per gallon more than the prior week’s price but $0.403 less than a year ago. Also, as of April 17, the East Coast price increased $0.051 to $3.512 per gallon; the Gulf Coast price advanced $0.088 to $3.341 per gallon; the Midwest price rose $0.074 to $3.590 per gallon; the Rocky Mountain price increased $0.086 to $3.524 per gallon; and the West Coast price increased $0.068 to $4.525 per gallon.
• For the week ended April 15, there were 245,000 new claims for unemployment insurance, an increase of 5,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended April 8 was 1.3%, an increase of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended April 8 was 1,865,000, an increase of 61,000 from the previous week’s level, which was revised down by 6,000. This is the highest level for insured unemployment since November 27, 2021. States and territories with the highest insured unemployment rates for the week ended April 1 were California (2.4%), New Jersey (2.4%), Massachusetts (2.2%), Minnesota (2.1%), Rhode Island (2.1%), Alaska (1.8%), Illinois (1.8%), New York (1.8%), Oregon (1.7%), and Puerto Rico (1.6%). The largest increases in initial claims for unemployment insurance for the week ended April 8 were in California (+10,640), New Jersey (+3,378), Texas (+2,981), Pennsylvania (+2,921), and Connecticut (+1,619), while the largest decreases were in Ohio (-3,138), Indiana (-926), Missouri (-552), Michigan (-516), and Georgia (-468).
There’s plenty of important economic data being released this week. The March report on new home sales kicks off the week. Sales of new, single-family homes rose 1.1% in February. New orders for durable goods dipped 1.0% in February after falling 5.0% in the previous month. The week closes with two very important reports. The advance estimate of gross domestic product for the first quarter is out. The economy accelerated at a rate of 2.6% for the fourth quarter. The week closes with the release of the report on personal income and outlays. While personal income increased 0.3% in February, consumer spending slowed from 1.8% in January to 0.2% in February, as consumers felt the pinch of rising prices. The Personal Consumption Expenditures Price Index, a measure of inflation, rose 0.3% in February after climbing 0.6% during the prior month. For the 12 months ended in February, the PCE price index climbed 5.0%, down from the January pace of 5.4%.
On this episode of Novice and the nerd, Laura and Derek do a postmortem on the Silicon Valley Bank failure and how some of their issues could impact local banks in our area.
Market Commentary: Bank Fallout
Read our blog by Co-Chief Investment Officer, Betsey A. Purinton, CFP® on the fallout from recent bank closures.
*Past performance is not indicative of future results. Indices are unmanaged and you cannot directly invest in them. The Nasdaq Composite Index measures all NASDAQ U.S. and non-U.S. based common stocks listed on the Nasdaq Stock Market. The S&P 500 index is based on the average performance of 500 industrial stocks monitored by Standard and Poor’s. The data referred to above was taken from sources believed to be reliable. StrategicPoint Investment Advisors (SPIA) has not verified such data and no representation or warranty, expressed or implied, is made by StrategicPoint Investment Advisors. Certain statements contained herein may be statements of future expectations and other forward-looking statements that are based on SPIA’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words “may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue” and similar expressions identify forward-looking statements. SPIA assumes no obligation to update any forward-looking information contained herein.
Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.
The information contained in this post is not intended as investment, tax or legal advice. StrategicPoint Investment Advisors assumes no responsibility for any action or inaction resulting from the contents herein. Third party content does not reflect the view of the firm or of our parent company, Focus Financial Partners. LLC and is not reviewed for completeness or accuracy. It is provided for ease of reference.
Parts of this report were prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2023. Part of this content contributed by Forefield, Inc.