Company / Analytics

Week 13 in Brief

North America

U.S stocks finished higher on Friday as March jobs data showed the economy was improving. The data further confirms investor sentiment that the Federal Reserve needs to be aggressive to act on rising inflation.

How did the major indices perform?

• The Dow Jones Industrial Average gained 139.92 points, or 0.4%, to close at 34,818.27.
• The S&P 500 Index added 15.45 points, or 0.3%, to finish at 4,545.86.
• The Nasdaq Composite rose 40.98 points, or 0.3%, to end at 14,261.50.
• The Dow fell 0.1% for the week, while S&P 500 rose 0.1%, and the Nasdaq advanced 0.7%

What drove the US market?

• Economic Data: Data showed the U.S. economy created new 431,000 jobs in March, and the unemployment rate fell to 3.6% from 3.8%. Analysts expected 490,000 jobs in March, and a drop in the unemployment rate to 3.7% from 3.8%, according to the Wall Street Journal.
• The U.S. Labour Department noted that hourly pay rose sharply, pushing the increase in the past 12 months to 5.6%, the highest rate since the early 1980s. Employment in January and February combined is 95,000 higher than previously reported.
• Analysts believe the March jobs report indicates a healthy outlook of the US economy and will impact the Feds policies.
• The S&P Global US Manufacturing Purchasing Managers’ Index final reading for March was 58.8, up from 57.3 in February, a steep improvement in the health of the U.S. manufacturing sector. Meanwhile, the Institute for Supply Management’s manufacturing PMI, a closely followed index of U.S.-based factory activity, slipped to 57.1% in March from 58.6% a month earlier, its lowest reading since September 2020. Economists forecasted a slight improvement of 59%.
• Treasury Yields: Treasury yields rose after the jobs data was released, with the yield on the 2-year note moved back above the 10-year rate, inverting that yield curve measure. The measure inverted briefly earlier this week. Economists often view an inversion as a warning sign for a recession. On Friday, the 10-year U.S. Treasury bond yield ended the day at 2.38%, 6 basis points below the 2-year U.S. Treasury yield of 2.44%.
• Geopolitics: Developments in the Russia-Ukraine conflict continued to impact the market. Investors followed the news that negotiators from both sides were expected to hold talks via videoconference on Friday.
• Volatility: Stocks continue to face various headwinds, including a confluence of concerns around the geopolitical and macroeconomic backdrop contributed. Already these effects contributed to the worst quarterly performance in two years. Russia’s invasion of Ukraine upended geopolitical risks, raising the spectre of further snarls to global supply chains that have already been struggling to recover from pandemic-era disruptions.

Which US stocks were in focus Friday?

• Shares of GameStop fell about 1% after the video-game retailer announced it was planning to conduct a stock split for the first time in 15 years.
• Chinse stocks listed in the U.S. listed surged after a report that Chinese authorities will provide U.S. regulators full access to auditing reports. Shares of DiDi Global Inc. jumped 12.8%, while Bilibili, Pinduoduo, iQIYI, Alibaba Group, and NIO saw solid gains in their stock prices.
• After workers in one of its warehouses in New York voted to unionize, Amazon was in focus. Employees at Amazon’s warehouse on Staten Island won a historic union election to establish the first U.S. union in the company’s nearly 30-year history. The move intensifies a nationwide surge of organizing across significant companies like Starbucks and Disney.

How did the European markets perform?

• European stocks closed higher driven, as negotiations between Russia and Ukraine drove investor sentiment.
• The pan-European Stoxx 600 finished up 0.6%, with mining stocks leading with 2.2% gains. Almost all sectors and major bourses finished positively.
• European stocks are coming off their first losing quarter in two years after closing Thursday’s session down 6.3% since the start of the year.
• In individual stocks, British advertising company S4 Capital rose about 11%, recovering from Thursday’s losses after the company pulled its quarterly results due to an auditing delay. Meanwhile, after lowering its growth forecasts, French hospitality company Sodexo fell more than 9%.
• Compared to the US, analysts believe that, except for pharmaceuticals, most European equities are heavily discounted compared to their U.S. peers, signifying that the market has already factored in a lot of bad news, despite geopolitical volatility.
• Eurozone inflation accelerated in March to a fresh record high in economic data. New readings showed on Friday, coming in at an annual 7.5% compared to a Dow Jones consensus forecast of 6.9%.

How did Asian markets perform?

• Asia-Pacific shares closed mixed as data indicated Chinese manufacturing activity shrank in March. The Shanghai Composite closed 0.9% higher Friday, bringing its weekly gain to 2.2%. The Hang Seng Index rose 0.2% Friday, advancing 3% for the week. Japan’s Nikkei 225 fell 0.6% Friday and booked a weekly decline of 1.7%.
• Chinese tech stocks in Hong Kong saw sizable losses on Friday, with Alibaba falling 2.14% and Baidu plunging 4.45%. JD.com shed 2.14%. The Hang Seng Tech index declined 0.74% to 4,524.25.
• Data released Thursday also showed Chinese factory activity shrinking in March, with the official manufacturing PMI at 49.5, below February’s reading of 50.2. The data comes as China battles its most severe Covid-19 outbreak since the pandemic began
• MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.09%.

Bonds

The yield on the 10-year Treasury note rose 5 basis points Friday to 2.374%. For the week, the 10-year yield dropped 11.7 basis points. Treasury yields and prices move in opposite directions.

Commodities

• Oil prices were lower in the afternoon of Asia trading hours, with international benchmark Brent crude futures dropping 0.4% to $104.29 per barrel. U.S. crude futures slipped 0.66% to $99.62 per barrel.
• Meanwhile, on Friday, U.S.-allied countries in the International Energy Agency (IEA) agreed to their second coordinated deployment of oil stockpiles in a month to calm Russia-Ukraine war-roiled energy markets.
• Gold futures ended lower, with gold for June delivery falling nearly 1.6% to settle at $1,923.70 an ounce.

Currencies

• The ICE U.S. Dollar Index, which tracks the dollar against six major rivals, was up 0.3% on Friday but showed a weekly decline of 0.2%.
• The Japanese yen traded at 122.73 per cent, stronger than levels above 122 seen against the greenback yesterday. The Australian dollar changed hands at $0.7503, off levels around $0.747 seen yesterday.
• Bitcoin was up around 1.3% at $46,341.

Next Week

Investors should expect economic data releases that will provide additional insight into current economic conditions.