Market Commentary for the Week Ending March 6th
U.S. markets finished the week on a down note on a jobs reports that came in well below expectations. For the week, the S&P 500 fell 1.0% while the Dow was flat finishing down 0.1%. In Europe, on Friday, stocks were hit hard falling 2.0%, dropping stocks down 2.3% for the week. Japan saw stocks rally over the week rising 3.5% on large stimulus measures implemented by Japan’s central bank. Demand for treasuries surged as the 10 year Treasury yield fell to 1.698%, its lowest point since mid December.
Commodities have not been included in the first quarter equity rally as they posted their worst first quarter since 2010. Gold specifically has not done well recently as gold prices hit their lowest level in nine months during the week.
The March jobs report came in well below expectations with only 88,000 jobs added when expectations were for roughly 190,000 new positions. It was the lowest hiring rate in almost a year. The unemployment rate did drop to 7.6% but that was driven by workers leaving the job market.
Manufacturing in the U.S. continued to grow, but the pace of growth cooled from February and fell below expectations.
Euro-zone unemployment hit an all-time high in February rising to 12% up from 10.9% a year ago. Manufacturing activity also declined pointing to a likely sixth straight quarter of contraction in the country bloc.
U.S. auto sales rose just shy of 13% in March, their best March sales in 5 years, prompting economists to lift their full-year forecasts. Article
The ECB concluded its policy meeting with no changes, but chief Draghi insinuated that the bank would be open to an interest rate cut if the euro zone fails to show any improvement.
The Bank of Japan announced it would initiate unprecedented monetary easing policies. It plans to double its holdings of government bonds and the amount of yen in the economy in order to spur growth and fight deflation that has hampered the country. Yields on 10 year government bonds fell to -0.118% on the news.
Reposted from the Raffa Wealth Management Blog.
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