Friday, April 1, 2016

Economic Journal - Friday, 4/1/2016

(As of 7:20 am PST)

US stocks look set to begin the new month and new quarter on a negative note after wrapping up a quarter for the ages. The S&P500 finished the first quarter of 2016 with gains of 0.8% after a dismal January which sent the broad US indexes into official correction territory. The bounce off February’s lows was strong and swift and followed a rebound in oil prices and a more dovish Federal Reserve. As we enter the second quarter the same themes prevail for investors: oil prices, central bank policy, and global growth forecasts. We’ll get a picture of the impacts of these themes on US companies when earnings season kicks off in just about a week. In the meantime, there’s some important data on tap that may help investors firm up positions in the coming days. Today’s notable report was the official March jobs report. The government reported Friday that 215,000 new jobs were created in March – better than expected. The unemployment rate ticked up from 4.9% to 5% but average hourly wages rose by 0.3%. It was a strong headline number which indicates the economy is still expanding at a good clip. Other data today included a report on construction spending which showed spending fell 0.5% in February while a report on March factory activity (ISM index) showed activity expanding for the first time in six months. Lastly, a report on consumer sentiment showed March sentiment rising ahead of expectations. Most data is being overshadowed today by a sharp drop in oil prices, which comes ahead of a report on oil rig counts later this afternoon. Oil fell as much as 4% in early trading, dragging energy stocks to the downside as well. International markets moved into the weekend with some sizable losses, likely due to the drop in oil. Gold and treasury prices aren’t offering much safe haven support today with both asset prices down slightly.

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