Market Perspective for April 7, 2017

The Nasdaq hit a new intraday all-time high on Wednesday, fueled in part by a rapid Amazon (AMZN) advance. Overall, the markets were calm, ending the week with small losses. The U.S. airstrikes on Syria triggered a bump in gold and oil prices, but markets were little impacted by the news.
March’s mixed employment report netted most of the week’s headlines. Jobs came in lower than expected, but the unemployment rate fell. Investors took the report in stride and rate hike expectations were unchanged in the futures market. 98,000 new jobs were added to the economy in March, missing expectations of 185,000. Construction jobs went from an increase of 59,000 in February to only 6,000 in March, but major snowstorms and wintry weather may have dampened hiring. Retail jobs predictably fell by 30,000. J.C. Penney (JCP) announced store closings in March, while Sears (SHLD) said it wasn’t sure it could continue its operations. Online competition is largely responsible for the weakness. This week, Amazon (AMZN) announced a need for 30,000 additional part-time warehouse employees.
The unemployment rate fell 0.2 percent to 4.5 percent, and the U-6 unemployment rate that captures discouraged workers and those who want full-time work, fell 0.3 percent to 8.9 percent. Average hourly earnings increased 0.2 percent.
Crude oil prices came under pressure midweek when the government announced inventories increased 1.6 million barrels. Analysts forecast a drop of 0.4 million. American airstrikes on a Syrian airfield more than made up for the midweek losses though, helping crude finish the week at $52 per barrel. Energy was one of the better performing sectors for the week, rising nearly 1 percent.
March auto sales missed expectations, rising at an annualized pace of 16.6 million in March. Analysts forecast a pace of 17.3 million. The February U.S. trade deficit was smaller than expected due to rising exports. Weekly unemployment claims fell sharply to 234,000, bringing the number close to 44-year lows. Economists expected 251,000 initial claims. Finally, wholesale inventories increased 0.4 percent in February.
In earnings news, shares of Constellation Brands (STZ) popped 6 percent after reporting strong earnings. Monsanto (MON) shares also climbed after the firm beat earnings and sales estimates. It also guided analysts towards the high end of its 2017 earnings forecast range. Although brick-and-mortar retail is in trouble, not all firms are suffering. Bed, Bath & Beyond (BBBY) shares rallied after it reported earnings of $1.84 per shares, beating estimates by 7 cents. Shares of Walgreen’s (WBA) fell after it met earnings estimates, but missed sales estimates. The company blamed tough European conditions and the stronger U.S. dollar.

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