Despite a late-week surge, stocks closed lower last week. Traders saw the continued strength of the labor market as increasing the chances of a soft landing for the economy, while potentially delaying the Federal Reserve from cutting interest rates. Major stock benchmark indexes lost value, with the Russell 2000 and the Dow falling more than 2.0%. Ten-year Treasury yields rose as bond prices slid. Communication services, energy, and materials were the only market sectors to end the week ahead. Gold prices continued to surge, while crude oil prices rose by over 4.4%. Rising inflation, increased travel, a reduction in production, and the ongoing conflicts in the Middle East have contributed to the rise in crude oil prices.
Last Week’s Economic News
- March saw 303,000 new jobs added, well above expectations.
Manufacturing production expanded in March, hitting a 22-month high, according to the S&P Global Manufacturing PMI®. - The S&P Global US Services PMI® Business Activity Index ticked down to a three-month low of March. That said, the index remained above the 50.0 mark, indicating a rise in business activity, albeit at a slower pace.
- According to the Job Openings and Labor Turnover Survey, the number of job openings, at 8.8 million, was little changed in February from the prior month.
- The international trade in goods and services deficit increased in February by 1.9% to $68.9 billion. Year to date, the goods and services deficit decreased $3.9 billion, or 2.8%, from the same period in 2023.
- The national average retail price for regular gasoline was $3.517 per gallon on April 1, $0.020 per gallon more than a year ago.
- For the week ended March 30, there were 221,000 new claims for unemployment insurance, an increase of 9,000 from the previous week’s level.
Eye on the Week Ahead
Inflation data is available this week with the release of the March Consumer Price Index. The CPI has been trending higher on a monthly basis since the beginning of the year. Another increase may prompt a more hawkish response from the Federal Reserve as to the timing of a reduction in interest rates.
Have a nice week!
Sincerely,
Robert G. Carpenter