Broker Check


THIS WEEK'S UPDATE

| April 04, 2022
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THE WEEK ON WALL STREET

Stocks spent last week digesting the sharp gains of previous weeks as investors

assessed a tightening yield curve, the war in Ukraine, and an uncertain outlook for

economic growth and inflation. The Dow Jones Industrial Average slipped 0.12%,

while the Standard & Poor’s 500 was flat (+0.06%). The Nasdaq Composite index

led, picking up 0.65% for the week. The MSCI EAFE index, which tracks developed

overseas stock markets, rose 1.02%.


STOCKS PAUSE

Stock prices bounced around following strong gains in two previous weeks as money

managers appeared to reposition their portfolios ahead of the first-quarter close. Oil

was under pressure all week as prices fell on news that Shanghai imposed a strict

lockdown due to COVID infections. President Biden announced a sustained release

of oil from the country’s strategic petroleum reserve. Bond yields reversed their

recent climb. The flattening in the yield curve triggered some concerns about

economic growth and the possibility of a recession.


LABOR MARKET

With economic growth worries overhanging the market, last week’s employment

reports showed continued strong demand for workers. The Job Openings and Labor

Turnover Survey reported the number of open positions remained near record

highs, with job openings exceeding the number of available workers by a record five

million. Afterward, the Automated Data Processing employment report saw private

payrolls grow by 455,000 in March, slightly above consensus expectations. Finally,

the government’s monthly jobs report showed that employers added 431,000 jobs

in March, lowering the unemployment rate to 3.6%. That’s approaching the 50-year

low of 3.5% reached in February 2020.


THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: Factory Orders.

Tuesday: Institute for Supply Management (ISM) Services Index.

Wednesday: Federal Open Market Committee (FOMC) Minutes.

Thursday: Jobless Claims.


THE WEEK AHEAD: NOTABLE COMPANIES REPORTING EARNINGS

Wednesday: Levi Strauss & Co. (LEVI).

Thursday: Conagra Brands (CAG).


FINAL THOUGHTS

There is still a lot of negative news flow yet the market has been fairly

resilient. Some think we may have seen the low for the year, while others are calling

for lower prices. While there are headwinds we are facing (but inn’t there always

some headwind and negative news?) there are some tailwinds like low

unemployment and COVID in the U.S. is beginning to wane. It must be exciting to

be a hotel operator near Disney after the past few years. I hear they are at capacity

most of the time. Earnings reports will start again in heavy fashion in a few weeks,

which will probably give some additional insight into how the consumer is holding

up. Stay tuned…


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