Market Week: April 25, 2022

The Markets (as of market close April 22, 2022)

Wall Street closed lower last week as investors weighed mixed earnings data against increased certainty of aggressive interest rate hikes by the Federal Reserve. It was the third straight week of losses for the S&P 500 and the Nasdaq, while the Dow declined for the fourth consecutive week. The hawkish stance taken by the Fed has equities, particularly tech and growth shares, retreating. The small caps of the Russell 2000 fell the furthest last week, followed by the Nasdaq, the Global Dow, the S&P 500, and the Dow. Among the market sectors, only real estate and consumer staples posted weekly gains. Ten-year Treasury yields rose by 8 basis points as bond prices slid lower. Crude oil and gold prices declined, while the dollar advanced.

Stocks edged lower while bond yields rose to begin the week last Monday. The small caps of the Russell 2000 slid 0.7%, pulled lower by underperforming health care and industrials sectors. The remaining benchmark indexes listed here closed the day relatively flat, as the Dow, the Nasdaq, and the S&P 500 wavered between small gains and losses throughout the day. Ten-year Treasury yields rose 3.4 basis points to 2.86%. Crude oil prices added nearly $1.00 to reach $107.89 per barrel. The dollar and gold prices also advanced.

Wall Street rallied last Tuesday, buoyed by strong, first-quarter earnings data from several companies. Of the 48 companies in the S&P 500 that reported first-quarter earnings, 79% posted strong returns. The Nasdaq and the Russell 2000 each gained about 2.0%, followed by the S&P 500 (1.6%), the Dow (1.5%), and the Global Dow (0.4%). Crude oil prices waned on demand concerns, dropping nearly $6.00 to $102.5 per barrel. Bond prices continued to slide, pushing the yield on 10-year Treasuries up 5.1 basis points to 2.91%. The dollar edged higher, while gold prices dipped nearly $37.00 to $1,949.40 per ounce.

Equities ended last Wednesday mixed, with the Dow (0.7%), the Global Dow (0.6%), and the Russell 2000 (0.4%) advancing, while the Nasdaq (-1.2%) and the S&P 500 (-0.1%) lost value. First-quarter earnings data continued to be generally upbeat. Prices on 10-year Treasuries advanced, pulling yields down 7.3 basis points to 2.84%. Crude oil prices were flat, while the dollar and gold prices slid.

Despite an early-day surge on the heels of positive earnings data, stocks closed last Thursday lower after Federal Reserve Chair Jerome Powell said a 50-basis point rate hike is "on the table" when the central bank meets on May 3-4. The Russell 2000 dropped 2.3%, followed by the Nasdaq (-2.1%), the S&P 500 (-1.5%), the Dow (-1.1%), and the Global Dow (-0.8%). Crude oil prices climbed to $103.97 per barrel. The dollar inched higher, while gold prices slid. The yield on 10-year Treasuries rose 7.7 basis points to 2.91%.

Stocks closed last Friday lower to end a week that saw the market seesaw. Each of the benchmark indexes listed here fell more than 2.25%, with the Dow and the S&P 500 declining 2.8%, followed by the Russell 2000 and the Nasdaq, which slid 2.6%. Ten-year Treasury yields dipped slightly to end the day at 2.90%. Crude oil prices declined $2.14 to $101.65 per barrel. The dollar inched higher, while gold prices waned.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • March saw the number of building permits for residential construction increase by 0.4%. However, single-family permits slid 4.8%. The number of privately owned housing starts rose 0.3% in March, driven higher by a 7.5% increase in multi-unit starts, which was offset by a 1.7% dip in single-family housing starts. Overall housing completions dipped 4.5% last month, and single-family housing completions dropped 6.4%.

  • Existing home sales fell 2.7% in March, declining for the second straight month. Sales of existing homes are down 4.5% since March 2021. Total housing inventory at the end of March increased 11.8% from February but fell 9.5% from one year ago. Unsold inventory sits at a 2.0-month supply at the present sales pace, up from 1.7 months in February and down from 2.1 months in March 2021. The median existing-home price for all housing types in March was $375,300, up from $357,300 in February and ahead of the March 2021 price of $326,300. Sales of existing single-family homes also fell in March, down 2.7% from the February estimate and off 3.8% from March 2021. The median existing single-family home price in March was $382,000, an increase over the February median existing single-family home price of $363,800.

  • The national average retail price for regular gasoline was $4.066 per gallon on April 18, $0.025 per gallon less than the prior week's price but $1.211 higher than a year ago. Also as of April 18, the East Coast price decreased $0.04 to $3.93 per gallon; the Gulf Coast price was flat at $3.73 per gallon; the Midwest price slid $0.02 to $3.88 per gallon; the West Coast price decreased $0.04 to $5.10 per gallon; and the Rocky Mountain price edged up $0.01 to $4.15 per gallon. Residential heating oil prices averaged $3.86 per gallon, about $0.54 per gallon more than the prior week's price. U.S. crude oil refinery inputs averaged 15.7 million barrels per day during the week ended April 15, which was 194,000 barrels per day more than the previous week's average. During the week ended April 15, refineries operated at 91.0% of their operable capacity, and gasoline production increased, averaging 9.8 million barrels per day.

  • For the week ended April 16, there were 184,000 new claims for unemployment insurance, a decrease of 2,000 from the previous week's level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended April 9 was 1.0%, a decrease of 0.1 percentage point from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended April 9 was 1,417,000, a decrease of 58,000 from the previous week's level. This is the lowest level for insured unemployment since February 21, 1970, when it was 1,412,000. States and territories with the highest insured unemployment rates for the week ended April 2 were New Jersey (2.3%), California (2.2%), Alaska (2.0%), Minnesota (2.0%), Illinois (1.7%), Massachusetts (1.7%), New York (1.7%), Rhode Island (1.7%), Pennsylvania (1.5%), and the Virgin Islands (1.5%).The largest increases in initial claims for the week ended April 9 were in Missouri (+7,194), Michigan (+5,950), California (+3,215), Indiana (+3,193), and Texas (+2,617), while the largest decreases were in Ohio (-3,886), Wisconsin (-1,159), Oklahoma (-776), Utah (-270), and Hawaii (-219).

Eye on the Week Ahead

There's plenty of important economic data out this week, headlined by the initial estimate for the first-quarter gross domestic product. The March report on personal income and outlays is also available at the end of the week. Personal income rose 0.5% in February, while consumer spending increased 0.2%. Consumer prices advanced 0.6% in February and were up 6.4% since February 2021.

Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers.
Securities offered through Lincoln Investment, Broker/Dealer, Member FINRA/SIPC.
www.lincolninvestment.com

Outlook Financial Group, LLC and the above firms are independent and non-affiliated.

The Lincoln Investment Companies do not provide tax, legal, or social security claiming advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Diversification or asset allocation do not guarantee a profit or protect against a loss. Calculators are provided only as general self-help planning tools. Results depend on many factors, including the assumptions you provide and may vary with each use and over time. We do not guarantee their accuracy, or applicability to your circumstances.

Prepared by Broadridge Advisor Solutions Copyright 2022.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.

Market Week: April 18, 2022

The Markets (as of market close April 14, 2022)

Stocks ended last week mostly lower. Each of the benchmark indexes listed here closed down during the holiday-shortened week, as Wall Street was closed in observance of Good Friday. Tech shares slid lower, pulling the Nasdaq down 2.6%. The S&P 500 also fell more than 2.0% for the week. Only the Russell 2000 pushed higher. Ten-year Treasury yields, the dollar, and gold prices advanced. Crude oil prices, which had fallen in recent weeks, reversed course, climbing more than $8.00 per barrel. Inflationary indicators showed no slowdown in March, with consumer prices climbing 1.2%, pushed higher by rising oil prices resulting from the Russia-Ukraine war. Among the market sectors, energy and utilities were the only areas to gain for the week, while information technology and communication services were the worst performers.

Treasury yields rose and stock prices fell to begin the week last Monday. Tech shares and energy stocks led the decline. The Nasdaq lost 2.2% on the day after falling nearly 4.0% the previous week, marking the worst performance since late January for the tech-heavy index. The S&P 500 dipped 1.7%, the Dow fell 1.2%, the Russell 2000 slipped 0.7%, and the Global Dow fell 0.5%. Bond prices also dropped, sending yields higher. Ten-year Treasury yields jumped 6.7 basis points to 2.78%. The dollar and gold prices advanced. Crude oil prices declined $3.30 to $94.97 per barrel.

Despite gains earlier in the day, stocks closed last Tuesday down. Investors pulled away from equities, resuming worries that the Fed will accelerate interest-rate increases following the latest data from the Consumer Price Index (see below). The Dow, the S&P 500, and the Nasdaq fell about 0.3%, while the Global Dow dipped 0.5%. The small caps of the Russell 2000 increased 0.3%. Ten-year Treasury yields fell 5.5 basis points to 2.72% as rising bond prices pulled yields lower. Energy shares rose 1.7% as crude oil prices surged 6.8% to $100.70 per barrel. The dollar and gold prices increased.

Wall Street bounced back last Wednesday, with each of the benchmark indexes listed here posting solid gains. The Nasdaq led the increase, climbing 2.0%, followed by the Russell 2000 (1.9%), the S&P 500 (1.1%), the Dow (1.0%), and the Global Dow (0.7%). Ten-year Treasury yields slipped 3.8 basis points to 2.68%. The dollar also fell, while crude oil prices continued to advance, adding $3.72 per barrel to reach $104.32 per barrel. Consumer discretionary led the market sectors, advancing 2.5%.

Stocks ended the holiday-shortened week lower last Thursday. Each of the benchmark indexes ended the day in the red, led by the Nasdaq (-2.1%) and the S&P 500 (-1.2%). The Russell 2000 slid 1.0%, the Dow fell 0.3%, and the Global Dow dipped 0.1%. Energy was the only sector to gain ground, while information technology dropped 2.5%. The yield on 10-year Treasuries rose 14 basis points to 2.82%. Crude oil prices reached $106.24 per barrel, an increase of nearly $2.00 per barrel. The dollar advanced, while gold prices fell.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • Consumer prices vaulted 1.2% higher in March and have risen 8.5% over the past 12 months. Increases in the indexes for gasoline (18.3%), shelter (0.5%), and food (1.0%) were the largest contributors to the overall CPI increase. The shelter index was by far the biggest factor in the increase, with a broad set of other indexes also contributing, including those for airline fares, household furnishings and operations, medical care, and motor vehicle insurance. In contrast, the index for used cars and trucks fell 3.8%. It should be noted that a major contributing factor in the March CPI increase was the surge in fuel prices following Russia's invasion of Ukraine. The 12-month increase was the largest since the period ended December 1981. This latest data will likely support a more aggressive response from the Federal Reserve with interest-rate hikes and a faster reduction in bond holdings.

  • Prices at the producer level increased 1.4% in March. Over the past 12 months, producer prices have moved up 11.2%, the largest increase since data was first calculated in November 2010. In March, goods prices advanced 2.3%, while prices for services increased 0.9%. Since March 2021, producer prices less foods, energy, and trade services increased 7.0%. As with consumer prices, much of the increase in producer prices in March is attributable to a jump in energy prices, spurred higher by the Russia-Ukraine war.

  • March saw inflationary pressures continue in international trade. Import prices advanced 2.6% last month, while export prices rose 4.5%. The March increase in imports was the largest monthly increase since April 2011. Import prices have risen 12.5% since March 2021. Import fuel prices advanced 14.6% in March — the largest one-month increase since July 2020. Regarding export prices, the March advance was the largest monthly increase since January 1989 when data was first calculated. Export prices have increased 18.8% over the 12 months ended in March.

  • Retail sales rose 0.5% in March and 6.9% since March 2021. Retail trade sales were up 0.4% last month from February and increased 5.5% year over year. Gasoline station sales jumped 8.9% in March, general merchandise store sales rose 5.4%, sales at food services and drinking places increased 1.0%, and food and beverage store sales climbed 1.0%. Conversely, sales from motor vehicle and parts dealers fell 1.9%, and online sales slid 6.4%.

  • The federal budget deficit in March was $192.7 billion, $467.0 billion lower than the March 2021 deficit. Through the first six months of the fiscal year, the deficit sits at $668.3 billion, over 61.0% lower than the deficit over the same period in the previous fiscal year. Compared to fiscal year 2021, government expenditures are down 18.0% so far this fiscal year, while receipts are up 25.0%. Contributing to the increase in government receipts is a 36.0% increase in individual income tax receipts and a 22.0% jump in corporate tax receipts.

  • Total industrial production advanced 0.9% in March and rose at an annual rate of 8.1% for the first quarter. Total industrial production in March was 5.5% above its year-earlier level. Manufacturing output gained 0.9% in March, pushed higher by a 7.8% jump in the output of motor vehicles and parts, while factory output elsewhere moved up 0.4%. The index for utilities increased 0.4%, and the index for mining advanced 1.7%.

  • The national average retail price for regular gasoline was $4.091 per gallon on April 11, $0.079 per gallon less than the prior week's price but $1.242 higher than a year ago. Also as of April 11, the East Coast price decreased $0.08 to $4.00 per gallon; the Gulf Coast price fell $0.08 to $3.73 per gallon; the Midwest price slid $0.08 to $3.90 per gallon; the West Coast price decreased $0.08 to $5.14 per gallon; and the Rocky Mountain price was unchanged at $4.14 per gallon. Residential heating oil prices averaged $3.32 per gallon, about $0.11 per gallon less than the prior week's price. U.S. crude oil refinery inputs averaged 15.5 million barrels per day during the week ended April 8, which was 424,000 barrels per day less than the previous week's average. During the week ended April 8, refineries operated at 90.0% of their operable capacity. Gasoline production increased last week, averaging 9.5 million barrels per day.

  • For the week ended April 9, there were 185,000 new claims for unemployment insurance, an increase of 18,000 from the previous week's level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended April 2 was 1.1%, unchanged from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended April 2 was 1,475,000, a decrease of 48,000 from the previous week's level. States and territories with the highest insured unemployment rates for the week ended March 26 were California (2.4%), New Jersey (2.3%), Alaska (2.1%), Minnesota (2.0%), Massachusetts (1.9%), Rhode Island (1.9%), New York (1.8%), Georgia (1.7%), Illinois (1.7%), and Puerto Rico (1.7%).The largest increases in initial claims for the week ended April 2 were in Ohio (+1,509), Pennsylvania (+1,478), California (+1,082), Illinois (+509), and Florida (+466), while the largest decreases were in Michigan (-2,491), Texas (-2,487), New Jersey (-1,105), Kentucky (-1,046), and New York (-866).

Eye on the Week Ahead

This week, economic news focuses on the housing sector with the release of the housing starts report and the latest existing home sales data for March. Building permits and existing home sales fell in February but are expected to rebound in March.

Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers.
Securities offered through Lincoln Investment, Broker/Dealer, Member FINRA/SIPC.
www.lincolninvestment.com

Outlook Financial Group, LLC and the above firms are independent and non-affiliated.

The Lincoln Investment Companies do not provide tax, legal, or social security claiming advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Diversification or asset allocation do not guarantee a profit or protect against a loss. Calculators are provided only as general self-help planning tools. Results depend on many factors, including the assumptions you provide and may vary with each use and over time. We do not guarantee their accuracy, or applicability to your circumstances.

Prepared by Broadridge Advisor Solutions Copyright 2022.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.