top of page
  • J. J. Wenrich CFP®

Weekly Market Performance – Markets Higher Amid Banking Concerns

Markets Blog

Index Performance

U.S. and International Equities

Markets Higher

Stocks ended their second consecutive week higher. Energy led all sectors on the back of higher crude oil prices. Investors overlooked banking health concerns, in addition to global central banks’ hawkish response to persistent inflation pressures.


The Financial Times reported that more than $340 billion has shifted from banks to higher-paying U.S. money market instruments. This trend caught the attention of Treasury Secretary Janet Yellen, per her comments yesterday highlighting the “structural vulnerabilities” of the nonbanks sector.


Developed international outperformed U.S. stocks even as concerns about the European banking sector remain in the forefront of investor’s minds. The Eurozone inflation landscape continues to improve, however the absolute level still remains high.


Fixed Income Mixed

The Bloomberg Aggregate Bond Index finished lower as bond prices sold off and yields increased. This reverses two straight weeks of higher performance for the index. In addition, high-yield corporate bonds, as tracked by the Bloomberg High Yield index, gained ground this week. This particular fixed income investment class had been the most affected given the recent banking climate challenges.


While still positive for the month, agency mortgage-backed securities (MBS) have underperformed other core bond sectors due to still elevated levels of interest rate volatility. As we get more clarity around the Federal Reserve’s (Fed) rate hiking campaign, we expect interest rate volatility to subside, which should allow agency MBS to outperform. We retain our slight overweight MBS allocation in our models.


Commodities Mixed

Energy prices finished mixed even as traders remain concerned over the present banking climate and its potential effect on the economy. Crude oil rallied for the second straight week after reaching a 15-month low three weeks ago. Natural gas prices declined for the third straight week. The major metals, gold, silver, and copper, ended the week mixed.


Economic Weekly Roundup


February Personal Consumption Expenditures Improves

The Commerce Department reported that the PCE price index excluding food and energy increased 0.3% for February. That was below the 0.4% estimate and lower than January’s increase of 0.5%. Including food and energy, headline PCE rose 0.3% monthly and 5% annually, compared with 0.6% and 5.3% in January, respectively.


Eurozone Inflation

Eurozone preliminary headline Consumer Price Index (CPI) came in cooler than expected in March but remains elevated at 6.9% year-over-year. Core inflation was in line with economists’ expectations but witnessed a small uptick vs. February.


U.S. Consumer Confidence

The Conference Board reported that confidence in the US economy increased in March despite the recent banking industry challenges. The Board reports that the index increased to 104.2 in March from an upwardly revised reading of 103.4 the month before. The index print surpassed FactSet economist expectations of 100.9.


The March headline index saw a boost from consumers’ improved levels of confidence for the six-month-ahead time period. The Expectations Index increased to 73 from 70.4 in February, while the Present Situation Index decline to 151.1 from 153.


Eurozone Consumer Confidence

According to the European Commission, Eurozone economic confidence declined for the second straight month in March. This month’s print reflected slightly lower confidence in the industry, retail trade, and construction sectors as sentiment in services remained for the most part unchanged.


Wholesale Inventories

U.S. wholesale inventories rose 0.2% in February, which came in higher than FactSet economist estimates. Wholesale inventories increased last month in order to support increased demand for goods as the economy grows and supply chains recover from the pandemic.


Weekly Unemployment Report

Initial claims for the latest week came in above economists’ expectations as well as the prior weeks’ report while continuing claims came in below expectations. Labor markets continue to show limited signs of softening.


Week Ahead

The following economic data are slated for the week ahead:

  • Monday: S&P Global PMI Manufacturing (Mar), construction spending (Feb), ISM Manufacturing (Mar)

  • Tuesday: Durable orders (Feb), factory orders (Feb), JOLTS Job Openings (Feb)

  • Wednesday: ADP Employment Survey (Mar), trade balance (Feb), PMI Composite (Mar), S&P Global PMI Services (Mar), ISM Services PMI (Mar)

  • Thursday: Weekly initial and continuing unemployment claims, GDP (Q4)

  • Friday: Hourly earnings (Mar), average workweek (Mar), manufacturing payrolls (Mar), nonfarm payrolls (Mar), March Employment, consumer credit (Feb)




IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.


Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. For more information on the risks associated with the strategies and product types discussed please visit https://lplresearch.com/Risks


References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.


Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.


All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.


Securities and advisory services offered through LPL Financial, a registered investment advisor and broker-dealer. Member FINRA/SIPC.


For Public Use Tracking 1-05362539


For a complete list of descriptions of the indexes and economic terms referenced in this publication, please visit our website at lplresearch.com/definitions

Commentaires


Les commentaires ont été désactivés.
bottom of page