All data is for the week ended April 15, 2022. Note the markets were closed last Friday in observance of Good Friday.
Equities were down across all the major indices with the S&P 500 declining 2.37%, the Russell 2000 easing 0.22% and the NASDAQ losing 3.93%. Overseas, the developed markets (MSCI EAFE) eased 0.26% while the emerging markets (MSCI EM) were down 0.67%. In the US, energy and materials were the best performing sectors while technology and communication services were the poorest performers. Value outperformed growth.1
The yield curve steepened last week as the rate on 2-year treasuries remained flat while the 10-year yield rose 17 basis points and the 30-year yield increased 23 basis points. The 10-year finished at a 2.83% yield. Mortgage rates rose once again and now stand at 5.13% for a 30-year loan.1
Crude oil inventories jumped a surprising 9.4 million barrels in the first week of April versus the consensus expectation for a 400,000 barrel increase in supplies.2 However, major global trading houses are planning to cut purchases from Russia’s state-controlled oil companies in the next 30 days to fall in line with European Union sanctions on Russia, reducing available supplies.3 The price of West Texas crude rose 8.3% to 106.38 per barrel.4
Inflation at the consumer level was in line with expectations of 1.2% in March vs. February, while core inflation (excluding volatile food and energy) was 0.3%, below expectations of 0.5%. On a year over year basis, the all- items index increased 8.5%. Notably, used car prices reversed the trend from significant increases to a decrease of 3.8% for the month. Nearly all of the high level sub-components in core goods also slowed.5
Inflation at the producer level was ahead of consensus expectations, rising 1.4% in March vs. February and 11.2% on a year over year basis. This represented the highest level since 2010. Core wholesale prices (excluding volatile food and energy) rose 0.9% vs. expectations of a 0.5% gain. Prices for processed goods for intermediate demand – an indicator of future prices from manufacturers – rose 21.7% over the past year.6
JP Morgan (JPM), a G50, Core Select and Contrarian Choice holding, reported earnings that missed consensus expectations.Whilecore banking metrics were relatively strong, income from investment banking disappointed. The chairman stated that reserves for loan losses last quarter increased due to higher inflation and the war in Ukraine.8 Shares declined 5.52% for the week
Procter & Gamble Co. (PG), a G50 holding, increased its dividend by 5%. This dividend increase marks the 66th consecutive year that P&G has increased its dividend and the 132nd consecutive year that P&G has paid a dividend.9 Yield on the new rate is 2.30%. The stock was down 0.96% for the week.
Southwest Airlines Co. (LUV), a Contrarian Choice and Core Select holding, shares rose 13.39% for the week after a major competitor (Delta Air Lines, ticker DAL) reported stronger quarterly results than anticipated, increased pricing and disclosed that it had the highest bookings ever over a five-week period.10
Did you know…
Jellyfish live in every ocean. They have survived five mass extinctions over 700 million years or more despite most of them lacking specialized digestive, central nervous, respiratory, or circulatory systems.
Mariann Montagne, CFA
7 All weekly changes in company stock prices: Yahoo Finance