Weekly market snapshot
Chief Economist Scott Brown discusses the latest market data.
The March 15 to 16 Federal Open Market Committee (FOMC) minutes noted a general agreement among policymakers to begin reducing the balance sheet in May, ramping up the monthly runoff to $95 billion in three months. In comparison, during the 2017 to 2019 runoff, it took more than a year to reach a maximum reduction of $50 billion per month. “Many” FOMC participants wanted a 50 basis-point hike at the March meeting but settled for a 25 basis-point move due to the Russian invasion of Ukraine. The minutes also noted that one or more 50 basis-point rate increases could be appropriate at future meetings, “particularly if inflation pressures remained elevated or intensified.”
Initial claims for unemployment benefits fell to 166,000 in the week ending April 2. The four-week average was 170,000, the lowest since the Labor Department began collecting the figures in 1967. Unit motor vehicle sales fell to a 13.3 million seasonally adjusted annual rate in March, down from 14.0 million in January and 24.4% lower than in March 2021 (reflecting supply constraints). The ISM Services Index rose to 58.5 in March, from 56.5 in February, consistent with strong growth (but not as brisk as in late 2021).
Next week: Higher gasoline prices will sharply boost the (CPI) in March and should add a little to the retail sales figure. Some prices of durable goods (such as used cars) may roll back a little, but durables account for just 13% of the CPI and inflation in non-energy services (57% of the CPI) should remain elevated. Ex-autos, retail sales appeared mixed over the course of the month. Financial markets (both stocks and bonds) will be closed for the Good Friday holiday, but the Fed is scheduled to release March industrial production figures.
Indices
| Last | Last Week | YTD return % | |
|---|---|---|---|
| DJIA | 34,480.76 | 33,174.07 | -5.11% |
| NASDAQ | 13,614.78 | 13,129.96 | -12.98% |
| S&P 500 | 4,411.67 | 4,259.52 | -7.44% |
| MSCI EAFE | 2,149.67 | 2,053.78 | -7.98% |
| Russell 2000 | 2,065.02 | 2,011.67 | -8.18% |
Consumer Money Rates
| Last | 1 year ago | |
|---|---|---|
| Prime Rate | 3.50 | 3.25 |
| Fed Funds | 0.32 | 0.08 |
| 30-year mortgage | 4.5 | 3.40 |
Currencies
| Last | 1 year ago | |
|---|---|---|
| Dollars per British Pound | 1.315 | 1.397 |
| Dollars per Euro | 1.109 | 1.198 |
| Japanese Yen per Dollar | 118.570 | 108.840 |
| Canadian Dollars per Dollar | 1.261 | 1.241 |
| Mexican Peso per Dollar | 20.519 | 20.400 |
Commodities
| Last | 1 year ago | |
|---|---|---|
| Crude Oil | 103.63 | 64.60 |
| Gold | 1,941.80 | 1,729.20 |
Bond Rates
| Last | 1 month ago | |
|---|---|---|
| 2-year treasury | 2.14 | 1.58 |
| 10-year treasury | 2.37 | 1.96 |
| 10-year municipal (TEY) | 3.31 | 2.45 |
Bond Rates
| Last | 1 month ago | |
|---|---|---|
| 2-year treasury | 1.92 | 1.45 |
| 10-year treasury | 2.18 | 1.95 |
| 10-year municipal (TEY) | 3.03 | 2.6 |
Treasury Yield Curve – 4/08/2022
As of close of business 4/07/2022
S&P Sector Performance (YTD) – 4/08/2022
Economic Calendar
| April 12 | — | Consumer Price Index (March) |
| April 13 | — | Producer Price Index (March) |
| April 14 | — | Jobless Claims (week ending April 9) |
| — | Import Prices (March) | |
| — | Retail Sales (March) | |
| — | UM Consumer Sentiment (mid-April) | |
| April 15 | — | Good Friday Holiday (markets closed) |
| — | Industrial Production (March) | |
| April 19 | — | Building Permits, Housing Starts (March) |
| April 20 | — | Fed Beige Book |
| April 28 | — | Real GDP (1Q22, advance estimate) |
| May 4 | — | FOMC policy decision |
| May 6 | — | Employment Report (April) |
| June 15 | — | 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 April 7, 2022.