Happy Easter! I know this is only Thursday, but the financial markets, along with our offices will be closed tomorrow in observance of Good Friday and the Easter holiday. I hope you are able to spend time with family and friends on this joyous weekend. The holiday may have come a little earlier this year, but the early Spring weather is already in fabulous form!
Another relatively quiet week is in the books as the dust from the first quarter settles. We certainly haven’t been without a few ups and downs so far, but it will mark the first quarter in the “win” column. I always like to share some data, especially when it comes to thinking of the past and what the future might hold for us. Some things to consider as we head into the spring and early summer stretch.
S&P 500 +7.5% YTD
DJIA +0.9% YTD
NASDAQ +17% YTD (The hardest hit sector in 2022 - TECH)
International +8.6% YTD
Emerging +4% YTD
U.S. Bonds +3% YTD
Source: Franklin Templeton
Oil prices moved a bit higher this week as OPEC announced a decrease in production and output. Some of this is likely in response to a much milder winter than was expected which has subsequently driven up storage costs. I also wouldn’t be surprised if there is a political agenda behind this as well. Considering the ongoing war in Ukraine and tensions high between the U.S. and China, there is much to be gained globally for a few countries that view the U.S. as a threat as opposed to an ally. With inflation remaining elevated here domestically, a rise in prices at the pump will only add to the frustration for U.S. consumers. Our own economist, Kara Murphy, released her views on this situation via a short video included here: https://www.kestraim.com/market-insights/040423-mwm-oil .
It will be interesting to see how our current administration navigates these maneuvers as more calls to unlock our own natural resources grow louder again.
We had some interesting data points from the jobs and labor markets this week. Private sector hiring rose by just 145,000 in March, down from 261,000 in February and below the estimate of 210,000. On top of that, layoffs are up nearly fivefold so far this year with tech companies leading the way. This was a trend we started to see late last year and has continued to build in 2023. This is adding fuel to the ongoing recession fears. With the release of the full unemployment number next week, more signs could be pointing to a broader slowdown in general. As we have discussed in the past, the Federal Reserve’s role in slowing down the economy while trying to thread the needle for a soft landing is nearly an impossible task. As more time passes, the data will show us how that job is going. A primary objective for the Fed, whether we like it or not, is to increase unemployment. Increased unemployment typically lowers spending, therefore growth. A slowdown in growth by default should lower costs and thus inflation as spending decreases. Perhaps these next few weeks will show us that these objectives are starting to take shape. For now, it becomes a “will they or won’t they” increase the base interest rates by another 0.25% in a few short weeks. Time will certainly tell.
For now, go hide some eggs in a really good place so you can find them later in the summer. That is always a fun adventure!
Christopher E. Wasson, CFP®
Mosaic Asset Partners, LLC
1122 Kenilworth Drive, Suite 310
Towson, MD 21204
410.821.0089 fax 410.821.5993
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. Investor Disclosures: https://www.kestrafinancial.com/disclosures
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security