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Weekly Update – April 5, 2019

  • Global stocks racked up a week of quiet gains without many catalysts. The S&P 500 index finished higher for its seventh
    straight session, chalking up 11 weeks of gains in the 14 weeks so far this year. According to Dow Jones Market Data,
    Friday marked the S&P 500’s longest winning streak since October 2017.
  • There were positives but few surprises: nonfarm payrolls came in upbeat as expected, positive economic data from
    China promised a boost for emerging markets and Europe, and a China-United States trade deal inched forward. U.S.
    stocks rallied midweek after economic data showed manufacturing activity had perked up in the U.S. and China,
    sweeping away fears of global recession and coaxing investors back into U.S. stocks.
  • This led to a sell-off of government bonds, which lifted long-term U.S. Treasury yields above shorter-term Treasurys,
    restoring a normal yield-curve slope and undoing a five-day inversion of the three-month to ten-year segment. The 10-
    year Treasury yielded near 2.5% at Friday’s close.
  • Oil prices jumped after the world’s top producers cut production, ending at $63/ bbl. Gold prices were down slightly.
    The U.S. dollar was flat against a basket of major currencies.
  • Nonfarm payrolls jumped in March to 196,000, surpassing economists’ expectations. Also, the unexpectedly weak
    showing in February was revised upward from 20,000 to 33,000. Unemployment held steady at 3.8%. Average hours
    worked rose 0.1%, while average hourly earnings fell 0.2%.
  • The Caixin China Manufacturing PMI index rose in March to 50.8, from 49.9 in February, crossing into expansion for the
    first time in 2019. China’s official manufacturing PMI also crossed into expansion, rising to 50.5, a six-month high.
  • February U.S. retail sales declined 0.2%, confounding expectations for a 0.3% rise. Sales fell in most categories; food and
    beverages saw the biggest drops in a decade. January gains were revised from 0.2% to 0.7%.
  • March ISM manufacturing rose 0.9 points to 55.3 (est. 54.5). New orders were up 1.9 to 57.4. Respondent commentary
    was generally positive. Markit manufacturing PMI came in at 52.4, below consensus for 52.5 and February’s 53.0 reading.
    Export orders rose at the weakest rate in five months.
  • CPWM Weekly Market Monitor (2019.04.05)

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