Each of the Major Markets locked in their third consecutive weekly loss as of Friday. The largest losses were in the Dow Jones Industrial Average followed closely by the MSCI Emerging Markets.
These last few weeks of losses have chipped away most of the gains for the year for those indices still in the green. While the Dow took the largest loss last week, it remains the best performing major index year to date but with less than a percent gain to show for it. The S&P 500 and the Emerging Markets Index also are still positive but only hold onto those gains by only a fraction of a percent.
This week began with a sideways trading range on Monday followed by a substantial gain with Tuesday’s Trading session. Tuesday’s 1.25% gain represented the best percentage return in 2 Months and wiped away the prior week’s net loss. This was in spite of a number of mixed economic reports and earnings releases.
However, the positive sentiment was short lived as Wednesday saw a steady stream of selling after the first two hours open.
Thursday managed to open higher only to see the session bounce around being positive for both the day and the week before closing virtually unchanged.
Finally, Friday closed out the week opening near the prior day’s close, continuing Thursday’s erratic behavior before breaking below the prior week’s close in the afternoon where it stayed for the remainder of the day to close ½ percent lower on the week.
There were a fair number of economic reports released throughout the week. Monday began with the Labor Market Conditions Index which showed another negative reading for the fourth consecutive month. While the -0.9 reading was better than the -2.1 reading from March, when this report has shown 4 or more consecutive negative results, it has often been an indicator of market weakness.
Tuesday’s mid-morning release of the JOLTs report saw an all-time high reading on the Job Openings. When Janet Yellen was first appointed Federal Reserve chair, it was cited that this report was a favored component of her own Economic Dashboard. While the headline news of Job Openings was positive, digging deeper into the report, there was concern in the results for Hiring. As has been the case for the last number of months, this report showed that more Job Openings were being reported than were being filled with the Hiring. This disparity highlights the idea that while there may be job opportunities, Employers are being more selective in who it is that they higher as they seek out the fabled “Purple Squirrels”. This a term used by employment recruiters to describe prospective employees with:
“precisely the right education, experience, and qualifications that perfectly fits a job’s multifaceted requirements. In theory, this prized “purple squirrel” could immediately handle all the expansive variety of responsibilities of a job description with no training and would allow businesses to function with fewer workers.”
The hope is also that they would work for peanuts.
Turning our attention from the labor market to commodities. Friday’s weekly Baker Hughes Weekly Rig Count reported a record low number of active oil rigs in the US. The total rig count of 406 is far from the peak reading of 2031 back in September of 2008.
Meanwhile, Wednesday’s U.S. Petroleum Balance fell 3.41 million barrels from last week’s all-time high reading of 543 million barrels.
The S&P Crude Oil Index rose 3.43% for the week, recovering last week’s loss of 2 and ¾ percent decline.
Metals were beat up last week. Both Industrial and Precious Metals declined week over week with the worst returns in the Industrial metals. Now only Zinc has any significant gains year to date.
As mentioned Earlier, Emerging Markets had a rough week. The MSCI Emerging Market closed down -1.15% for the week on Friday as it reported losses for the fourth week in a row.
Finally, looking ahead to next week, there will be over 20 economic reports released. The most impactful reports will likely be those that are housing related. There is the Housing Market Index on Monday followed by Housing Starts on Tuesday and Existing Homes Sales on Friday.
Join us next week as we review these releases and additional economic news.