The Major Markets struggled again last week. All 5 of the major markets ended lower with the greatest losses in the MSCI World index, shadowed closely by the losses in the Dow Jones Industrial Average. When Tuesday came to a close last week, the Dow Jones Average recorded a quarterly loss of 23.20. This stands as the worst start to the year in the history of the Index.

But these losses were eclipsed by the weakness seen in the Small and Mid-Cap space. Small and Mid-Cap indices, especially the value side of these capitalizations continue to struggle this year. The largest decline last week was seen in Small Cap Value with a loss of 7.6%. This takes the losses for the year down to over 43% as of Friday. This is nearly double the YTD loss in the S&P 500.

While the style boxes all closed the week lower, there were some gains seen at the sector level. Consumer Staples, Energy, and Health Care all managed to climb higher for the week while the remaining 8 sectors ended lower.

Energy closed higher due to massive gains in Crude Oil late in the week. These gains   were fueled by optimism generated by President Trump that Saudi Arabia and Russia would come to an agreement in how to reduce the current supply of oil that has flooded the market. This caused WTI Crude Oil Futures to surge over 37% within two trading days.

Healthcare climbed higher in part due to some positive news in the battle against COVID-19. On Monday, Johnson and Johnson announced a lead vaccine candidate with the goal of the first batches available for emergency use in early 2021. Abbott also announced a new molecular point-of-care test for the detection of the virus which could provide positive results within five minutes and negative results within 13.

This positive news was a welcome change ahead of last week’s employment data. Wednesday’s ADP report saw a drop of 27,000 in the U.S. NONFARM PRIVATE payroll. Digging deeper, the losses were actually much more substantial in the small businesses that employ 1-49 employees. This segment saw a drop of 90,000 while the midsized and large sized businesses actually increased in number. However, this report utilizes data through March 12, well before many states implemented shelter-in-place rules that saw a massive drop in employment nationwide.

Friday’s BLS Employment report for March also reflected data through March 12th. However, estimates for a drop of 100,000 for March proved to be too conservative as the report saw a loss of 701,000 jobs in the month. This caused the unemployment rate to climb from 3.5% to 4.4%
Because these reports use midmonth data, the weekly initial jobless claims have proven to be a better real-time indicator of the coronavirus’ impact on the employment market. After setting a record 3.283 million claims for the week ending March 21st, the figure was revised higher to 3.307 million. After the prior all-time high record was revised higher still , it was then more than doubled for the reading of the week ending March 28th, to an incredible 6.648 million weekly claims.

For greater context, March’s BLS Employment situation reported the seasonally adjusted unemployment figure at 7.14 million. When combined, the last two weeks of record initial jobless claims total nearly 10 million that were not yet reflected in the monthly BLS report. Depending on how long state’s keep current pandemic response measures in place, this could cause April’s unemployment rate to climb toward 10 to 15%.