Mid-Week Market Minute 4.5.23

Market Updates

Stocks Mixed, Bonds Lower; Data Shows Slowing Job Growth

Global stocks were mixed in early trading this week as investors continued to monitor the banking situation and the potential impacts for the broader economy. The S&P 500 was lower by about 0.50%, while international stocks were essentially flat. In an interview on Tuesday, U.S. Treasury Secretary Janet Yellen said the banking situation has stabilized, but regulators remain ready to act to protect deposits if necessary.

In bonds, U.S. Treasury yields moved lower on the week, but the potential for further rate hikes from central banks is contributing to market volatility. Right now, futures markets are pricing in about a 40% chance of another 0.25% (25 basis point) rate hike at the Fed’s next meeting on May 3. Meanwhile, the energy market added to uncertainty this week after OPEC+ said it would cut output by 1.16 million barrels of oil per day. Crude oil prices moved markedly higher on the week, with a barrel of WTI Crude oil currently trading around $80 after starting the week around $75.

On the data front, markets got a look at the latest ADP private payrolls report, which showed slowing job growth for March. The report followed Tuesday’s job openings report that suggested the Federal Reserve’s efforts to cool the red-hot labor market may be working. For the first time in nearly two years, the total number of job openings fell below 10 million. In response, GDP estimates have moved lower, with the Atlanta Fed’s GDPNow model currently forecasting real GDP growth of approximately 1.7% on an annualized basis for the first quarter of 2023.

Source: GSAM, CNBC, JPMorgan

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