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Last Week was the Worst of the Year for the Stock Market

Last Week was the Worst of the Year for the Stock Market

April 09, 2024

The job market in the U.S. is doing well despite the stock market having a bit of a tough time last week. This situation is partly because people who invest in stocks are torn between wanting a strong economy to make companies do better and hoping for lower interest rates to make borrowing money cheaper. Also, people are getting paid a bit more than before, showing that businesses are doing okay. Besides, the interest rates for government loans have gone up because the overall economy is showing strong signs.

Last Week’s Market Overview

  • The S&P was down .93%, almost 1% since its recent peak
  • The Dow Jones Industrial Average recorded its worst week of the year, down 2.23%
  • The NASDAQ was down .79% and Russell 2000 (small company stock) was down 2.86% for the week.

Employment and Wage Growth:

  • In March, the U.S. economy added 303,000 jobs, exceeding the expected 205,000, and marking an acceleration from February's 270,000.
  • The unemployment rate edged down to 3.8%, maintaining a sub-4% rate for over two years.
  • Average hourly earnings rose by 0.3% in March, in line with forecasts and an increase from February's 0.2% rise.
  • With increasing employment and wage increases, more mney to spend so it might be difficult for inflation to trend toward Fed’s target, meaning possible delay in interest rate cuts.

Sector Performance:

  • The majority of sectors, nine out of eleven, reported negative returns. Healthcare, Real Estate, and Consumer Staples were the most affected.
  • The Energy and Communication Services sectors, however, posted gains for the week.

Financial Instruments:

The yield on 10-year Treasury notes climbed by 0.19% to 4.394%.  The 10 year rate is the one most closely tie to mortgage rates.

  • Gold futures saw a significant 4.8% increase, reaching $2,345, while U.S. WTI crude oil prices rose by 4.5% to $86.91/barrel.

In summary, the job market in the U.S. is still doing strong, even though the stock market and different business areas are having varied results. Also, there's been some important changes in how much interest the government pays on its loans, the price of gold, and the cost of oil.