The opportunity to grow your financial knowledge

The opportunity to grow your financial knowledge

Weekly Market Snapshot

April 9, 2020

Market Commentary
by Scott J. Brown, Ph.D., Chief Economist

Initial claims for unemployment benefits totaled 6.61 million in the week ending April 4, down from 6.87 million in the week before. Prior to seasonal adjustment, 15.1 million people have filed claims in the past three weeks – that’s 9.2% of the labor force – and the figures understate the degree of job losses (as not every laid-off worker can file a claim).

The UM Consumer Sentiment Index fell to 71.0 in the mid-April reading, down from 89.1 in March and 101.0 in February. It was the largest decline on record. The report held a cautionary tone, indicating that sentiment would likely fall further in the weeks ahead.

In an online conference call through the Brookings Institute, Fed Chair Powell displayed a calm demeanor. While his initial comments seemed to be little more than hand-holding, showing steady leadership is an important role for the Fed in these times. He addressed a number of questions about the impact of COVID-19 and what the Fed is doing.

Next week, jobless claims will remain the key economic data report to watch (these figures are timely and relatively accurate). Retail sales results for March are likely to be horrible (with the decline magnified by the seasonal adjustment). The Index of Leading Economic Indicators will post a huge drop, reflecting declines in most components, but especially from the increase in jobless claims.


Indices

  Last Last Week YTD return %
DJIA 23433.57 21413.44 -17.89%
NASDAQ 8090.90 7487.31 -9.83
S&P 500 2749.98 2526.90 -14.88%
MSCI EAFE 1581.06 1506.66 -22.38%
Russell 2000 1191.66 1085.81 -28.58%

Consumer Money Rates

  Last 1 year ago
Prime Rate 3.25 5.50
Fed Funds 0.00 2.40
30-year mortgage 3.34 4.19

Currencies

  Last 1 year ago
Dollars per British Pound 1.238 1.305
Dollars per Euro 1.086 1.126
Japanese Yen per Dollar 108.83 111.14
Canadian Dollars per Dollar 1.401 1.333
Mexican Peso per Dollar 24.043 18.932

Commodities

  Last 1 year ago
Crude Oil 25.09 63.98
Gold 1684.30 1308.30

Bond Rates

  Last 1 month ago
2-year treasury 0.24 0.50
10-year treasury 0.74 0.92
10-year municipal (TEY) 2.09 2.57

Treasury Yield Curve – 04/09/2020

Chart

As of close of business 04/08/2020


S&P Sector Performance (YTD) – 04/09/2020


Chart

As of close of business 04/08/2020


Economic Calendar

April 14  —  Import Prices (March)
April 15  —  Retail Sales (March)
 —  Industrial Production (March)
 —  Homebuilder Sentiment (April)
 —  Fed Beige Book
April 16  —  Jobless Claims (week ending April 11)
 —  Building Permits, Housing Starts (March)
April 17  —  Leading Economic Indicators (March)
April 24  —  Durable Goods Orders (March)
April 29  —  Real GDP (1Q20, advance estimate)
 —  FOMC Policy Decision
May 1  —  ISM Manufacturing Index (April)
May 8  —  Employment Report (April)

 

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

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Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business April 8, 2020.

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