The Nasdaq declined 1.70 percent this week, the S&P 500 Index 2.03 percent and the Dow Jones Industrial Average 2.58 percent.
Despite the broader indexes declining, some sectors performed well. Crude oil rebounded 32 percent this week, finishing the week at $28.80 per barrel. SPDR Energy (XLE) gained 5.19 percent. SPDR Consumer Staples (XLP) increased 3.38 percent and SPDR Healthcare (XLV) rose 2.02 percent.
Bond prices also stabilized this week. iShares iBoxx Investment Grade Corporate Bond (LQD) fell only 0.63 percent. iShares 20+ Year Treasury (TLT) gained 0.72 percent.
Economic data coming over the next month will not be positive. However, it is important to remember that our economy was on very solid footing before the global pandemic fully reached the United States. Once we can return to our normal lives, we anticipate a rapid recovery.
Before businesses shuttered and individuals were forced to stay at home, data was impressive. Pending home sales climbed 2.4 percent in February. Consumer confidence as measured by the Conference Board came in stronger than expected in March. It fell from 132 to 120 but was much better than analysts forecast.
The manufacturing PMI reading was 48.5 in March. Some analysts predicted the PMI would fall much further due to quarantine measures. This reinforces what we’ve pointed out: that manufacturing hasn’t been severely impacted yet. The services PMI fell to 39.8, indicating 60 percent of respondents reported a drop in activity.
Weekly jobless claims hit 6.6 million this week. Over the past two weeks, nearly 10 million Americans filed initial claims for unemployment. The March employment report showed businesses shed 701,000 jobs during the month. The unemployment rate climbed to 4.4 percent. Average hourly wages jumped 0.4 percent, possibly because lower wage service jobs have disappeared.
The U.S. Dollar Index advanced 2.08 percent on the week. iShares MSCI Emerging Markets (EEM) climbed 0.63 percent and iShares China Large Cap (FXI) rose 2.36 percent.
Finally, we think it is important to urge our members to turn off computers and phones for a few hours a day. Go for a hike. Take your dog for a walk. Ride your bicycle. Work in your garden. Embrace this time with your family. Perhaps this situation is a reminder that some of us may need to take a deep breath and focus on life’s priorities.
The stock market will recover. We will continue to help you make money.
Love your children, spouse, sisters, brothers and parents. Keep them safe and stay well. Also provide a prayer for those on the front lines, and those less fortunate.