Stock indices ended the week higher after a strong start to Q1 earnings and a sharp rise in retail sales and housing starts.
Treasury yields fell with the 30-year bond yield closing at 2.276% and the 10-Year note closing at 1.576%. Crude oil rose to $63.13 a barrel and natural gas was rose to $2.687 per MMBTUs. The U.S. dollar index fell to 91.52 and gold rose to $1775.80 an ounce.
In the economic numbers this week:
- China reported:
- Exports grew 30.6% in March from the year earlier shutdown. However, March exports were down a seasonally adjusted 6.6% from the month of February.
- The economy grew 18.3% in the first quarter from a year earlier. China had a very strict lockdown in Q1 2020 so strong year over year growth was not a surprise.
- The Commerce Department reported
- The consumer-price index (CPI) rose 0.6% in the month of March and 2.6% in the prior 12 months. Core CPI, excluding volatile food and energy rose only 0.3% in March and 1.6% over the prior 12 months. Keep in mind that a year ago, prices were down due to the rapid shutdown of the U.S. economy. We expect the CPI numbers to continue be elevated in April and May.
- Retail sales jumped 9.8% in March on the heels of a new round of stimulus checks.
Source: U.S. Census Bureau
- Housing starts jumped 19.4% in March versus February and were 37% above March 2020.
- Building permits, an indicator of future housing starts, rose 2.7% in March from February.
- The Labor Department reported:
- A seasonally adjusted 576,000 workers filed initial claims for unemployment in the week ending April 10th down sharply from a revised 769,000 the week before. This was the lowest level since the pandemic began.
- The 4-week moving average, designed to smooth out volatility, fell to 683,000, also the lowest since the pandemic started.
- Continuing claims were nearly unchanged at 3.7MM in the week ending April 3rd.
- A broader measure of claims including extended benefits, pandemic assistance and other programs fell from 18.2MM to 16.9MM in the week ending March 27th.
- 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 10.9MM BPD to 11.0MM BPD.
- Natural gas storage rose 61BN cubic feet and is about at the average level at this time of year during the past five years.
- Baker Hughes reported the number of active oil rigs rose 7 to 344. The number of active natural gas rigs rose 1 to 94.
- Factset reported with 9% of S&P500 companies reporting, Q1 earnings the blended earnings growth rate is 30.2% (forecast plus actual for those companies reporting). If this continues, this may be the best quarter of earnings growth since Q3 2010.
Please call us if you have any questions.
Loren C. Rex, CFP®, MA Erik A Smith AIF®
President Managing Partner
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
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.