Weekly Economic Update: April 5, 2022

Presented by Nicholas Wealth Management

April 5th, 2022

Weekly Market Update

In this week’s recap: Markets weigh a menu of uncertainty.

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%.^1,2,3

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.^4,5

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 2020.⁶

Tip of the Week

Radio

Be sure to tune in every Saturday to Retire Ready with David Nicholas on 95.5 FM WSB at 7 pm!

Media

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Consumer sentiment is at a 10-year low. Inflation is at a 40-year high. Savings have dwindled to pre-covid levels. Recession signals are flashing! David Nicholas joined Stuart Varney on Fox Business last Tuesday, 3/29 to discuss where markets are heading.

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CITATIONS:

1. The Wall Street Journal, April 1, 2022
2. The Wall Street Journal, April 1, 2022
3. The Wall Street Journal, April 1, 2022
4. CNBC, March 29, 2022
5. CNBC, March 30, 2022
6. The Wall Street Journal, April 1, 2022