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Stocks closed last week generally lower, with only the Nasdaq eking out a minimal gain. A rally last Friday wasn’t enough to recoup losses experienced during the week. Investors had quite a bit to digest over the past week. The Federal Reserve hiked the federal funds rate 25 basis points and gave no clear indication as to whether and when more rate increases may be coming. Regional banks continued to struggle, however bank stocks rallied late in the week to help ease investor concerns. The April jobs report was solid, but also showed the pace of hiring was slowing. Crude oil prices continued to tumble on concerns of a slowing U.S. economy and tepid Chinese demand.

Markets fell last Tuesday, pulled lower by declining financial and energy stocks. Investor concerns ticked higher following news that other regional banks were in jeopardy of failing, which came ahead of Wednesday’s anticipated 25-basis point interest rate hike by the Federal Reserve. 

Stocks closed higher last Friday on the heels of a strong jobs report (see below).

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

As expected, the Federal Open Market Committee raised the target range for the federal funds rate 25 basis points to 5.00%-5.25%. The FOMC noted that job gains have been robust and the unemployment rate has remained low, while inflation remains elevated. Despite the failure of several banks in the last few months, the Committee indicated that the banking system was sound and resilient. In attempting to moderate rising inflation, the Committee admitted that “tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation.” While the extent of the effects of the Committee’s actions remains uncertain, it “would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.”

The job sector continued to show strength in April. There were 253,000 new jobs added in April, not far off from the average monthly gain of 290,000 over the prior six months. In April, employment continued to trend up in professional and business services, health care, leisure and hospitality, and social assistance. The unemployment rate dipped 0.1 percentage point to 3.4%, while the number of unemployed persons declined by 182,000 to 5.7 million. 

Eye on the Week Ahead

Inflation data for April is available this week with the releases of the Consumer Price Index and the Producer Price Index. March saw the CPI inch up 0.1%, while the PPI declined 0.5%.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/ Market Data (oil spot price, WTI, Cushing, OK); (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.

Advisory Services are offered through MRA Advisory Group, a Registered Investment Adviser. This information was developed by Broadridge, an independent third party. It is general in nature, is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security. The investments and strategies mentioned may not be suitable for all investors. Past performance is no guarantee of future results. Nothing herein, nor any attachment, shall be considered to constitute (i) an offer to sell, nor a solicitation of an offer to purchase, any security, or (ii) tax or legal advice.

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