Stocks ended a shortened week of trading mixed amid revived recession fears on Wall Street triggered by weak economic data.
The Dow Jones Industrial Average gained 0.63%, while the Standard & Poor’s 500 slipped 0.10%. 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
Recession Fears Resurface
Renewed recession worries dented investor sentiment, and the week kicked off with a weekend announcement by OPEC+ nations of their intention to cut oil production.
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
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 Update: Hiring Cools; Recession Fears Rise.
April 10, 2023