Market Recap/Earnings Ahead – Monday Morning Market Memo – April 4, 2022

Market Recap/Earnings Ahead – Monday Morning Market Memo – April 4, 2022

Good morning,

The major stock market averages finished little changed last week – the Dow Jones Industrial Average dipped .1% to 34,818 – the NASDAQ Composite gained .7% to 14,262 – and the Standard & Poor’s 500 Index edged up .1% to 4,546.  The NASDAQ and S&P are now working a 3-week winning streak.  Capping off last week’s trading was the March Jobs Report released on Friday morning.

The U.S. Department of Labor reported the economy added 431,000 jobs last month.  While this headline number was less-than-expected, job gains for the previous two months were revised higher by 95,000, and the unemployment rate came in at 3.6%, a tick stronger than consensus forecasts.  Additionally, average hourly pay rose, pushing the increase for the past 12 months to 5.6%.  Overall, we consider this a healthy jobs report, which will contribute to the Federal Reserve’s interest rate hiking trajectory.

According to the CME FedWatch Tool, the probability for a rate hike at the next Fed meeting is 100%, while the chance of it being a ½ point hike (instead of ¼ point) is now at 73.3%.  Investors continue to grapple with the new reality of an aggressive Federal Reserve and rising interest rates.  Other continuing themes are the backdrop of high inflation and concern/uncertainty regarding the Russian invasion of Ukraine.  It will be a breath of fresh air to get something new to focus on in the upcoming weeks – Earnings Season…….

For the first quarter of 2022, the estimated earnings growth rate for the Standard & Poor’s 500 Index is 4.7%, according to data from FactSet.  As we say often during earnings season, remember the market adage – profits are the mother’s milk of stock prices!

All the best – Southport Station Financial Management, LLC