Stocks ended a shortened week of trading mixed amid revived recession fears on Wall Street triggered by weak economic data.
The Standard & Poor’s 500 slipped 0.10%, while the Dow Jones Industrial Average gained 0.63%. The Nasdaq Composite index lost 1.10% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, advanced +0.37%.1,2,3
Instead of the usual graph, I want to point out that when an index is basically flat (like the S&P 500 was last week) there still may be wide variation among the components of the index. Last week the Healthcare and Utilities sectors were each up 3.1%, followed by the Energy sector, up 3%. Meanwhile, industrials dropped 3.4%, and the Consumer Discretionary sector was down 3%.
Recession Fears Resurface
The prospect of higher oil prices not only revived inflation fears, possibly hurting the chances of a rate-hike pause by the Fed, but it raised concerns over future consumer spending. Stocks weathered the news well but buckled on weak manufacturing and services data in subsequent days. Stocks trended lower again after a lower-than-expected open-jobs number and a slowdown in private-sector hiring.
Stocks stabilized to close on Thursday, despite an increase in jobless claims and a pick up in March layoffs.
Cooling Labor Market
A string of labor reports last week reflected signs of a cooling labor market, beginning with an unexpectedly significant decline in the number of open jobs (falling below 10 million for the first time in nearly two years). The JOLTs report preceded payroll processor ADP’s employment report that saw a rise in private sector hiring of 145,000 (short of the consensus forecast of 210,000) and smaller wage gains.4, 5
After reports of a jump in initial jobless claims on Thursday and a 15% rise in layoffs in March, Friday’s March employment report showed the smallest increase in nonfarm payrolls (+236,000) since December 2020.6
This Week: Key Economic Data
Wednesday: Consumer Price Index (CPI). FOMC Minutes.
Thursday: Jobless Claims. Producer Price Index (PPI).
Friday: Retail Sales. Industrial Production. Consumer Sentiment.
Source: Econoday, April 7, 2023
This Week: Companies Reporting Earnings
Thursday: Delta Air Lines, Inc. (DAL)
Friday: JPMorgan Chase & Co. (JPM), Blackrock (BLK), UnitedHealth Group Incorporated (UNH), Citigroup, Inc. (C), The PNC Financial Services Group, Inc. (PNC)
Source: Zacks, April 7, 2023
"Humanity will ever seek but never attain perfection. Let us at least survive and go on trying."
– Dora Russell
How to Choose a Tax Preparer
It’s essential to choose a tax preparer that is suitable for your needs as well as reliable and ethical. After all, taxpayers are responsible for the info on their return, regardless of who prepared it.
Here are some tips from the IRS on how to choose a tax preparer who meets your needs:
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
Two Top Benefits of Garlic
Not only is garlic delicious, but it also has many potential health benefits (and no, one of them isn’t warding off vampires). Here are just two of the top benefits of garlic:
One of the most potent benefits of garlic is that it may help your immune system. A robust immune system can help combat sickness, including the common cold.
One large, 12-week study found that a daily garlic supplement reduced the number of colds by 63% compared to a placebo. The average length of cold symptoms was also reduced by 70%, from 5 days in the placebo group to just 1.5 days in the garlic group.
I can’t walk, but at times I run, and I am challenging to hide. I am always with you. What am I?
Last week’s riddle: Two couples played paintball. Each person had blue, green, yellow, or red paint, and wore a uniform in one of those same colors. Barbara used blue paint. The person wearing green used yellow paint. Steven did not wear the red uniform. Vicki used green paint and wore blue. Ian used the same color paint as his t-shirt. Can you match each person to the color of paint and uniform they used? Answer: Ian wore red and used red paint, Barbara wore yellow and used blue paint, Steven wore green and used yellow paint, Vicki wore blue and used green paint.
Colorado River, Grand Canyon National Park, Arizona
Footnotes and Sources
2. The Wall Street Journal, April 6, 2023
3. The Wall Street Journal, April 6, 2023
4. CNBC, April 4, 2023
5. CNBC, April 5, 2023
6. CNBC, April 7, 2023
7. IRS.gov, September 20, 2022
8. Healthline, May 5, 2022
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Weekly Market Insights: Hiring Cools; Recession Fears Rise.
April 10, 2023