Stock indices ended the week lower with the small cap Russell 2000 index down the most. Stocks tanked on Wednesday following the release of the minutes from the Federal Reserve’s March meeting. The FED plans to trim $95BN per month from the balance sheet, this is up from the maximum $50BN per month of quantitative tightening prior to the pandemic. The minutes also indicated most members favor increases of half percent increases going forward. Bond yields rose sharply with bond prices moving lower.
Treasury yields fell with the 30-year bond yield at 2.696% and the 10-Year note at 2.657%. U.S. crude oil fell to $97.90 barrel and natural gas rose to $6.323 per MMBTUs. The U.S. dollar index rose to 99.84 and gold rose to $1950.40 an ounce.
In the economic numbers
- The U.S. trade deficit fell 0.1% in February, but remains close to a record level. Both imports and exports rose.
- IHS released its monthly purchasing managers indices for March. Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
- U.S. manufacturing PMI rose from 57.3 to 58.8.
- U.S. services PMI rose from 56.5 to China manufacturing PMI fell from 5China services PMI fell from 50.2 to 42.0.
- Japan manufacturing PMI rose from 52.7 to 54.1.
- Japan services PMI rose from 44.2 to 49.4.
- Eurozone manufacturing PMI fell from 58.2 to 56.5.
- Eurozone composite PMI fell from 55.5 to 54.9.
- Canada manufacturing PMI rose from 56.6 to 58.9.
- Canada services PMI rose from 56.6 to 58.9.
- The Labor Department reported:
- First time claims for unemployment fell to 166,000, down from a revised 171,000 in the prior week. This is the lowest number of claims since November 1968.
- The 4-week moving average of claims, designed to smooth out volatility, fell to 170,000.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude oil rose from 11.7MM BPD to 11.8MM BPD.
- Natural gas storage fell 33BN cubic feet and is below the 5-year average at this time of year.
- Baker Hughes reported the number of active oil rigs rose 13 to 546. The number of active natural gas rigs rose 3 to 141.
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Loren C. Rex, CFP®, MA Erik A Smith, AIF®
Founder / Emeritus President & C.E.O.
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.