Stocks Mixed
With the start of earnings season just around the corner, the major U.S. stock indexes didn’t make any big daily movements during a holiday-shortened trading week that concluded on Thursday, prior to Friday's monthly jobs report. The S&P 500 slipped 0.1%, the NASDAQ fell 1.1%, and the Dow added 0.6%.
U.S. small caps trailed their large-cap peers as financial system stresses continued to weigh on smaller companies. A small-cap benchmark, the Russell 2000 Index, fell around 2.6% for the week. Since a recent high on February 2, the index has declined more than 12.0%.
A monthly gain of 236,000 U.S. jobs that was reported on Friday was the lowest since December 2020, but it marked the 27th straight month of solid job growth. The government also reported that unemployment slipped to 3.5% and wages rose at a moderate 0.3% in March relative to February, which could ease inflationary pressures.
Expectations are low heading into earnings season, which opens this week as major banks begin reporting first-quarter results. As of Friday, analysts surveyed by FactSet were expecting companies in the S&P 500 to post an average earnings decrease of 6.8% compared with the same period a year earlier—the biggest earnings decline since the second quarter of 2020.
The price of U.S. crude oil on Monday surged more than 6%, its steepest single-day gain since March 2022. The price rose above $80 per barrel after Saudi Arabia and other leading members of the OPEC consortium of oil-producing nations announced plans to cut production.
Yields of U.S. government bonds fell for the fourth week out of the past five, failing to extend the previous week’s gain. The yield of the 10-year U.S. Treasury bond fell to about 3.29% on Friday – down sharply from a recent peak of 4.07% on March 2. The yield of the 2-year note also dropped, falling to around 3.81%.
The price of gold extended its recent rise, moving above the $2,000-per-ounce threshold on Tuesday and trading as high as $2,037 on Thursday. The price has spiked about 12% since a recent low on March 8.
A Consumer Price Index report scheduled to be released on Wednesday will show whether the recent moderation in U.S. inflation extended into March. In February, inflation fell for the eighth consecutive month, posting a 6.0% annual rate—the lowest level since September 2021.
Source: John Hancock Investment Management
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