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Weekly Update – April 12, 2019

  • Global stocks had a choppy week, with gains in the United States, losses in Asia and a mixed bag in Europe. Markets took a leg down on Tuesday as investors mulled a range of concerns: earnings season apprehension, U.S. plans to impose tariffs on Europe, the International Monetary Fund’s downgrade of its global-growth forecast and a looming Brexit extension.
  • Relief came on Wednesday, and markets resumed their upward trajectory. Investors took encouragement from the Federal Open Market Committee’s March meeting minutes, which reaffirmed the FOMC’s rate pause. Parliament successfully pushed off the Brexit goblins until Halloween. What’s more, two major banks beat earnings expectations on Friday, an upbeat start to the 1Q19 season that sent stocks upward for the day.
  • Oil prices rose on the week, whereas gold prices declined. U.S. Treasurys yields rose across the curve; the widely watched 10-year T-note rose from 2.49% to 2.56%. The U.S. dollar ended slightly lower against a basket of major currencies.
  • Preliminary April results for the University of Michigan’s consumer surveys pointed to continued drift. From March to April, consumer sentiment slipped from 98.4 to 96.9, current economic conditions ticked up slightly and consumer expectations ticked down. The report noted the impact of tax reform on consumer confidence has all but disappeared, but rising income and low inflation are becoming more important.
  • The February JOLTS (job openings and labor turnover) report showed 7.1 million openings, the sharpest monthly decline since 2015, off January’s 7.6 million and the lowest level since March 2018.
  • Weekly initial jobless claims came in at 196,000, the lowest reading since October 1969. Week-to-week data are volatile, but the four-week average also hit a post-1969 low of 207,000.
  • March PPI rose 0.6% versus February’s 0.1% rise, which followed three months of declines. It was the fastest pace since October, but largely attributable to a 16% jump in gasoline prices; PPI ex-food and energy was up 0.3%.
  • The IMF cut its 2019 global GDP forecast from 3.5% to 3.3%, citing weaker Chinese growth, persistent trade tensions and European slowing. Yet the IMF expects growth to stabilize in 1H19 and firm thereafter.

CPWM Weekly Market Monitor (2019.04.12)

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