1st Quarter ends on a High Note
The S&P 500 rallied last week into March quarter end, Friday payday, closing out March and 1q23 on a high note. The markets rallied over the past month while the headline news was almost universally poor. The tech heavy Nasdaq 100 gained +6.69%. The 5 largest U.S. stocks all rose at least 10% in the month. The financial and energy heavy small-cap Russell 2000 index dropped -4.98%. If you exclude the 5 largest names plus Tesla, the S&P 500 would have been flat in Q1 meaning index weighting is outperforming equal weight indexes, opposite 2022. The S&P 500 was up over +7% in the first three months of the year despite concerns about ongoing rate increases by the Federal Reserve and bank contagion concerns.
The S&P 500 index ended last Friday + 3.5% higher at 4,109 from the prior week’s level of 3,971 with every sector green. Last week, the energy sector was the top-performing sector of the S&P 500 with a gain of +6.2%. Material stocks were higher by +4.9%, followed by a +4.4% gain in the industrial sector. The real estate group bounced back +5.2% last week, while the financial sector added another +3.7% to the previous week’s 0.5% gain. The laggards, while still positive on the week were Consumer staples, +2.5% higher, followed by a +1.8% gain in healthcare stocks.
The big news over the weekend is that OPEC+ nations agreed to cut oil output by more than one million barrels per day. This is sending oil prices 5-6% higher this Monday morning to test $80. The inflationary consequences of the move are lifting Treasuries yields above 3.5% for the 10-year, following last week’s 10 bp climb. The 2-year rate is at 4.10% after jumping 28 bps last week. President Biden’s pass and decision to delay refilling the strategic petroleum reserve below $70/bbl is looking bad.
This week’s economic news includes manufacturing PMIs and construction spending. Later on in the week we have job openings and private payroll data. The week ends Friday (the markets are closed) with the labor jobs market report. The consensus estimate among economists suggests the economy created 240,000 new jobs in March, while the unemployment rate is expected to remain unchanged at 3.6%.
The OHFG YouTube channel is currently undergoing some placement modifications. For now, “Stock Talk” can be found by clicking on this link and subscribing to its own content. https://www.youtube.com/@OakHarvestStockTalk. Alternatively, you can type “Stock Talk with Chris” in the You Tube search box, and you should be directed to the new content.
The investment content will be a “sub-channel” under our current OHFG channel. Please subscribe if you are interested.
4/31/2023: Stock Talk – Marching Higher into a Seasonally Stronger April – https://www.youtube.com/watch?v=g8HtgaEd04A
