Weekly Market Update

Stocks finished a holiday-shortened week of trading largely unchanged as investors digested the implications of a surprise OPEC oil production cut as well as signs of potential softening in the labor market. OPEC’s decision over the weekend caused energy prices to rally, but beyond denting hopes of lower inflation, the move also heightened concerns around global growth and demand for fossil fuels, particularly after the recent banking turmoil.  These fears were exacerbated by Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) indicating that job openings fell below 10 million in February for the first time since May 2021, coupled with a big jump in Thursday’s jobless claims.  However, the stock market’s response was fairly muted as odds of another rate hike on May 3rd from the Federal Reserve have fallen to only about 50% and investors are heartened by hopes that the Fed is much closer to the end of its tightening cycle than the beginning.

Markets are closed tomorrow in observance of Good Friday, but the US Labor Department is still releasing its employment report for March, so Monday has the potential to be unusually volatile, as investors will have to wait until after the long weekend to react.  Furthermore, retail sales, the consumer price index (CPI), the producer price index (PPI), and consumer inflation expectations will all be released next week and could trigger material market reactions.  Lastly, the first quarter S&P 500 earnings season unofficially starts next week with the banks, so next week is chock full of headlines and we do not expect this week’s rather quiet market action to continue.

Happy Easter and Passover!

Ian G. Browning, CFA
Managing Director, Investment Strategies | Shareholder

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