Weekly market snapshot

 

Chief Economist Scott Brown discusses the latest market data.

Tensions in Ukraine remained at the forefront for investors, but there were some important developments on the economic front.

In his monetary policy testimony to Congress, Fed Chair Pro Tempore Jerome Powell further solidified market expectations that the Federal Open Market Committee will raise short-term interest rates by 25 basis points (not 50 basis points) on March 16. The Fed is now expected to raise rates by 25 basis points at every policy meeting but is prepared to hike more aggressively if inflation fails to moderate as anticipated. The Fed’s Beige Book reported that firms were more able to pass higher costs along and “in most cases, demand has remained strong despite price increases.”

The February Employment Report was stronger than expected, with nonfarm payrolls up by 678,000 (a 6.8 million increase over the last 12 months). The unemployment rate fell to 3.8%, near the pre-pandemic level (a 3.6% average in 4Q19). Average hourly earnings were flat (+5.1% y/y), reflecting faster growth in lower-paying jobs. Average hourly earnings of production workers rose 0.3% (+6.7% y/y). The ISM surveys for February were mixed, but both remained consistent with strong demand and ongoing supply constraints.

Next week: The February Consumer Price Index should reflect higher gasoline prices. Core inflation is expected to remain elevated as inflation in services picks up.

 

Indices

	Last	Last Week	YTD return %
DJIA	33,794.66	33,223.83	-7.00%
NASDAQ	13,537.94	13,473.59	-13.47%
S&P 500	4,363.49	4,288.70	-8.45%
MSCI EAFE	2,107.87	2,108.09	-9.77%
Russell 2000	2,032.41	1,996.01	-9.48%

 

Consumer Money Rates

	Last	1 year ago
Prime Rate	3.25	3.25
Fed Funds	0.07	0.08
30-year mortgage	4.09	3.15

 

Currencies

	Last	1 year ago
Dollars per British Pound	1.335	1.395
Dollars per Euro	1.107	1.206
Japanese Yen per Dollar	115.470	107.010
Canadian Dollars per Dollar	1.268	1.266
Mexican Peso per Dollar	20.643	20.945

 

Commodities

	Last	1 year ago
Crude Oil	107.67	61.28
Gold	1,935.90	1,715.80

 

Bond Rates

	Last	1 month ago
2-year treasury	1.53	1.19
10-year treasury	1.84	1.83
10-year municipal (TEY)	2.51	2.45

Treasury Yield Curve – 3/04/2022

As of close of business 3/03/2022

S&P Sector Performance (YTD) – 3/04/2022

 

Economic Calendar

March 8	—	Small Business Optimism (February)
	—	Trade Balance (January)
March 10	—	Jobless Claims (week ending March 5)
	—	Consumer Price Index (February)
March 11	—	UM Consumer Sentiment (mid-March)
March 15	—	Producer Price Index (February)
March 16	—	Retail Sales (February)
	—	Industrial Production (February)
	—	FOMC Policy Decision
	—	Fed Summary of Economic Projections
	—	Powell Press Conference
March 17	—	Building Permits, Housing Starts (February)
	—	Industrial Production (February)
April 1	—	Employment Report (March)
May 4	—	FOMC policy decision

 

All expressions of opinion reflect the judgment of the author and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor’s returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business March 3, 2022.