Hey Folks, we are seeing price action continue to move higher as more money moves into the Equity markets while interest rates have risen a good deal over the past 12 months…a stronger USD in 2021 is helping keep inflationary pressures subdued…but can it last? Get my take on the current markets and price action in this week’s Round-Up.
MARKET SOUND BITES
Major indexes moved steadily higher to record highs, although the small-cap Russell 2000 Index recorded a modest loss. The technology-heavy Nasdaq Composite Index outperformed the broad market S&P 500 Index but stayed below its February peak…
The Labor Department reported that employers added 916,000 jobs in March, well above consensus estimates of around 650,000, and the most since last August…February job openings, reported Wednesday, hit almost 7.4 million, the highest since January 2019…Many observers were therefore surprised by Thursday’s report that initial jobless claims had hit their highest level (744,000) in three weeks…Much of the rest of the week’s economic data also surprised on the upside. The Institute for Supply Management’s (ISM) gauge of service sector activity jumped to its highest level on record, mirroring the ISM’s earlier report that factory activity had reached its highest level in four decades…and on Friday, the Bureau of Labor Statistics reported that producer prices rose by 1% in March, roughly twice consensus estimates. The jump pushed the year-over-year increase to 4.2%, the largest in nearly a decade…
The yield on the benchmark 10-year U.S. Treasury note increased somewhat on Friday morning in response to the producer price inflation data but moved slightly lower for the week as a whole…Speaking Thursday before the International Monetary Fund (IMF), Fed Chair Jerome “Power Ranger Boom Boom” Powell stressed that the global economy would remain fragile until the pandemic is brought under firm control and that the U.S. recovery remained “uneven and incomplete.”
Shares in Europe rose on growing hopes that injections of fiscal stimulus and dovish central bank policies would spur a global economic rebound… Industrial production in Germany and France fell sequentially in February, raising concerns about the pace of economic growth. In France, total output fell 4.7%, while industrial production in Germany contracted 1.6%, according to official data.
Chinese stocks recorded a weekly loss, extending several weeks of underperformance against other major global markets… Data indicating higher inflation and elevated U.S.-Sino tensions weighed on sentiment and outweighed positive corporate earnings… On the economic data front, the Services PMI jumped to 54.3, its fastest expansion pace since December 2020 and reinforcing the strong official PMI readings at the end of March… China reported that its consumer price index (CPI) rose to a five-month high in March, while the producer price index (PPI) accelerated 4.4% year over year…
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