Weekly Market Insight

Today's Market Recap

Dow +0.36%, S&P 500 +0.44%, Nasdaq +0.54%, Russell 2000 +0.42%

US equities finished higher in Monday trading, ending not far from best levels. Outperformers included semis/memory, banks, exchanges, managed care, hospitals, road/rail, A&D, homebuilders, restaurants, retail/apparel, and food/beverage; retail-investor favorites were also stronger. Big tech was mixed. Underperformers included software, pharma/biotech, commodity chemicals, asset managers, auto suppliers, telecom, and utilities. Treasuries were mostly firmer with some curve flattening; yields down 1-2 bp at the long end vs Friday's close. Dollar index was little changed. Gold finished up 0.1%. Silver ended down 0.1%. Bitcoin futures were up 4.2%. WTI crude settled up 0.8% in choppy trading. (FactSet)
Market built on last week's bounce amid abundant headline noise. Talk of Iran ceasefire from the weekend largely evolved as expected, with Iranian officials rejecting idea of a temporary ceasefire and arguing for a permanent solution before reopening Hormuz while Trump stressed tomorrow night's final deadline and prospects for US to do more damage to remaining energy infrastructure. President's bellicose tone continued into his afternoon press conference (largely focused on weekend pilot rescue), though still thoughts Trump may be setting up another round of escalate to de-escalate. More ships moving through Strait of Hormuz but nothing to really move the needle on shut-in sentiment. ISM services remained in expansion in March and new orders a bright spot, but other key metrics softened and prices climbed to near a 3-1/2-year high. Followed hotter March nonfarm payrolls print on Friday. Despite the recent data, bond yields fairly well behaved. Dampened bond vol a widely discussed positive for risk sentiment. Also more talk of tactical bounce support from positioning and sentiment indicators. (FactSet)
March ISM services printed at 54.0, below consensus for 54.9 and February's 56.1 (nearly a four-year high). New orders higher, also notable jump in prices component. Respondent commentary leaned positive though reflected some geopolitical uncertainty. (FactSet)

Last Week's Market Recap (Monday, March 30th - Friday, April 3rd)

Dow +2.96%, S&P +3.36%, Nasdaq +4.44%, Russell 2000 +3.28%

Major US equity indices were higher for the holiday-shortened week, helped by some hopes for a winding down of the Iran war. The Dow, S&P, and Nasdaq were higher after five consecutive weeks down; the small-cap Russell 2000 notched its second consecutive weekly gain. (FactSet)
Momentum names and retail-investor favorites fared well. Big tech was mostly higher. Other outperformers included semis, managed care, pharma, machinery, regional banks, and industrial/precious metals. Energy was the notable sector laggard. (FactSet)
Treasuries were firmer with a bit of curve steepening. The dollar was marginally weaker overall; DXY (0.1%). Gold +4.2% was higher after four weeks of declines; silver was up 4.5%. Bitcoin futures were up 1.4%. WTI crude rose 11.9% amid continued war/disruption concerns, settling at its highest level since mid-2022; WTI ended last week higher than Brent +3.5% for the first time in four years (helped by differences in futures contract timing). (FactSet)

S&P 500 Sector Performance (Source: FactSet)

Outperformers: Communication Services +6.39%, Tech +4.61%, Real Estate +3.76%, Financials +3.57%, Materials +3.39%
Underperformers: Energy (5.34%), Consumer Staples +0.67%, Utilities +1.60%, Healthcare +2.42%, Consumer Disc. +2.73%, Industrials +2.85%

What happened last week?

Geopolitics dominated the market discussion last week, with some investor optimism about an approaching offramp for the Iran conflict. There were reports Trump had told aides he was willing to end the military campaign even before a full reopening of the Strait of Hormuz, and repeated his view that diplomacy was ongoing and the conflict would not last much longer. These sentiments were dented by Thursday, after a bellicose Wednesday night address by the president and more indications Iranian officials are not interested in talking; but he also indicated Hormuz might be a problem for others to solve (though also comments about the extent of regional damage and the potentially long path to normalization). The situation remains unclear and headline volatility has been extremely high. (FactSet)
There was not a lot of incremental news outside of geopolitics, though there were several other themes of note. For instance, Treasuries saw a bit of a yield backup after several weeks of moving higher. Fed Chair Powell's remarks earlier in the week also leaned dovish (said longer-term inflation expectations remain well anchored). Fed funds futures now reflect expectations for slight easing into year's end, while just the Thursday prior they were pricing in some tightening. (FactSet)
There were several large M&A headlines despite the unsettled geopolitical backdrop. Sentiment also remained upbeat ahead of the impending Q1 earnings season, expected to see another round of double-digit gains. Positioning and month-/quarter-end dynamics were also seen as a tailwind. (FactSet)
Ahead of last Friday’s release of March nonfarm payrolls (expected to rebound from January's 92K pullback, though the market was closed), March ADP private payrolls topped consensus and February JOLTS job openings printed a bit below. Elsewhere on last week's economic calendar, headline February retail sales were ahead of forecasts, as were control-group sales. March consumer confidence came in ahead of expectations, though there was only marginal improvement in the labor-market differential and write-in responses skewed toward pessimism. March ISM manufacturing printed above consensus, though the new-orders and employment components ticked down. (FactSet)

This week

Economic releases this week will include ISM Services (Monday); February durable-goods orders (Tuesday); jobless claims, February PCE, and the final read of Q4 GDP (Thursday); and March CPI and preliminary April UMich consumer sentiment (Friday). (FactSet)
The minutes from the March FOMC meeting will be released Wednesday. (FactSet)
Treasury will auction $58B in 3Y notes on Tuesday, $39B in 10Y notes on Wednesday, and $22B in 30Y bonds on Thursday. (FactSet)
Major earnings releases will be thin this week; note the Q1 earnings season will see reports from the big banks beginning on 14-Apr. (FactSet)

Key Dates/Data Releases for this week (Source: Market Week)

4/7: Durable goods orders
4/9: GDP, Personal Income and Outlays
4/10: Consumer Price Index, Treasury statement

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