April 5 – April 9 Week in Review
It was a mostly positive week for the stock market last week. The S&P 500, up 2.7%, and the Dow Jones Industrial Average, up 2.0%, kicked off the week with a data-driven rally to new highs. The tech heavy Nasdaq Composite, up 3.1%, followed suit, while the small cap Russell 2000 underperformed with a 0.5% decline.
Ten of the 11 S&P 500 sectors ended the week in the green. None were more influential than the information technology and consumer discretionary sectors, which rose more than 4.0%. The energy sector was the lone holdout with a sharp 4% decline, as investors apparently took some profits.
On Monday, the market keyed off the prior week’s strong employment report for March, which was released on Good Friday when the stock market was closed, and a record-setting ISM Non-Manufacturing Index for March. Both sets of data indicated that the economic recovery is gaining momentum.
On Wednesday JPMorgan Chase CEO Jamie Dimon said in his annual shareholder letter that an economic boom could easily run into 2023. Market reaction to this well covered observation was muted, though, as the market was stuck in consolidation mode. Mr. Dimon also cautioned about the "not-unreasonable possibility that an increase in inflation will not be just temporary."
At the end of the week, the Producer Price Index increased a greater than expected 1.0%, bringing its year over year increase to 4.2%. The market stood by the Fed's thinking that any increase in inflation would be transitory.
Speaking of the Fed, the central bank's dovish monetary policy was reaffirmed in the FOMC Minutes from the March meeting and by Fed Chair Powell at an event hosted by the IMF last week.
In the bond market the 2 year Treasury yield fell three basis points to 0.153 and the 10 year yield closed up one basis point at 1.67%.
In other markets the U.S. Dollar Index fell closing at 92.18, WTI crude dropped over 3% finishing at $59.34 a barrel and gold edged slightly higher finishing at $1,744.10 an ounce.
April 12 – April 16 Economic Calendar
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