U.S. stocks suffered steep losses for the week as tensions grew over slowing global growth and a potential trade war. Our Short Term Indicator turned Neutral.
- U.S. Markets: The large cap S&P 500 closed near its closing low from February’s sell-off and suffered its worst weekly loss since the beginning of 2016.
- The technology-heavy NASDAQ Composite fared even worse. NASDAQ Composite fell a steeper -6.5%, losing the 7000-level and closing at 6,992. By market cap, smaller caps outperformed large caps with the S&P 500 large cap index giving up -6.0%, while the mid cap S&P 400 and small
cap Russell 2000 gave up -5.0% and -4.8%, respectively.
- International markets were not immune to the selling as all major non-US markets finished
in the red (though generally not as deeply in the red as the U.S). In Asia, China’s Shanghai Composite had its second down week giving up -3.6%, while Japan’s Nikkei also hit new lows for the year falling -4.9%. Hong Kong’s Hang Seng also finished down -3.8%. As grouped by Morgan Stanley Capital International, emerging markets retreated -4.7%, while developed markets gave up -3.6%.
- Commodities: Precious metals and energy managed to finish the week in the green. Gold rallied 2.9% to end the week at $1349.90 an ounce, while Silver added 1.9% and ended the week at $16.58. Energy powered ahead for a third straight week with West Texas Intermediate crude oil gaining 5.6% to close at $65.88 per barrel. But copper, viewed by some analysts as an indicator of world economic health due to its variety of uses, slumped -3.7%.
- U.S. Economic News: The number of people seeking new unemployment benefits rose by 3,000 to 229,000 last week but remained near their lowest levels since 1970. The reading modestly exceeded economists’ forecast of 225,000. The less-volatile monthly average of new claims increased slightly to 223,750. The Labor Department also reported the number of people already receiving unemployment benefits, so-called continuing claims, fell by 57,000 to 1.83 million. That number is at its lowest level since December of 1973. Overall, the employment picture in the U.S. hasn’t been this good in at least two decades and the biggest concern among employers continues to be difficulty finding skilled workers.
- The number of Americans seeking new unemployment benefits fell slightly last week,
remaining near a 50-year low. The Labor Department reported initial jobless claims declined by 4,000 to 226,000,well within the key 300,000 threshold that analysts use to indicate a “healthy” jobs market. Last week was the 158th consecutive week that claims remained below that level. Even more encouraging is the unemployment rate,which sits at a 17-year low of 4.1% and is likely to drop even lower in the coming months. Federal Reserve officials consider the labor market to be near or even a little beyond “full employment”. Continuing claims, which counts the number of people already receiving benefits, rose by 4,000 to 1.88 million. Continuing claims dropped below 2 million last spring and have remained there ever since.
- Sales of existing homes rebounded last month, rising 3% from January’s reading. The National Association of Realtors (NAR) reported existing-home sales ran at a seasonally-adjusted annual pace of 5.54 million in February. Year-over- year, sales were 1.1% higher than in February of 2017. At the current sales rate, there is a 3.4 month’s supply of homes available on the market, roughly half the amount considered to be a “healthy” housing market.
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