Week Ending 4/21/2022

MARKET RECAP

  • US stocks fell by 2.76% for the week. Stocks were actually up after the Wednesday close by about 1.5%, but that is when Fed Chair Powell pretty much¬† much promised a half-point increase at the next meeting on May 3-4. And then St. Louis Fed President James Bullard started talk of a 3/4 point rate increase, although said he prefers a series of half-point increases. Maybe the back to back comments were enough to jar investors into believing what the Fed has more or less been saying for weeks, that much higher rates are on the way. The market would then fall by almost 4% on Thursday and Friday.
  • The Fed-funds futures market is looking for 1/2 point next month, and 3/4 of a point for the June meeting, and then 1/2 point in late July. That increased the 2-year note by 27 basis points to 2.71%.
  • PMI reports are indicating a slight slow down in economies around the world The composite PMI for the US came in at 55.1, down from 57.7 in March. It was the lowest reading in three months. Services took the brunt of the hit, down to 54.7 from 58 while manufacturing¬† was strong, rising to 59.7 from 58.8, the highest reading in seven month.
  • Overseas, Europe’s biggest economy, Germany, reported a drop in the composite PMI to 54.5 in April from 55.1 in March.
  • The job market is still strong, weekly jobless claims was less than 200,000 for the ninth consecutive week. The job market hasn’t been this strong since 1969. Housing starts are also strong, permits for new homes is 6.7% higher from one-year ago.

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