Weekly Market Update: April, 14, 2023

Market Data as of Week Ending: 4/14/2023 unless noted otherwise

U.S. stock prices moved higher last week as investors weighed growing growth concerns versus moderating inflation. The S&P 500 rose 0.82% as markets looked towards the upcoming earnings season in which several financial companies kicked it off with better-than-expected results. For the third consecutive week, value stocks outperformed their growth counterparts while smaller-sized companies generally outperformed their large cap peers. Traditionally cyclical sectors rebounded as financials, materials, and consumer discretionary outperformed, while only real estate, utilities, info tech, and consumer staples closed with a loss this week. The energy sector continued its rally as supply concerns drove prices higher. Developed foreign and emerging market stocks moved higher last week and outperformed domestic equities.

U.S. Treasury yields rebounded last week as investors are pricing in at least one further rate hike despite growth concerns and slowing inflation. The 10-year and 2-year U.S. Treasury yields each rose 0.12% to finish the week at 3.52% and 4.08%, respectively. High yield bonds benefitted the most from the rebound in yields, outperforming across the curve. Yields for investment grade corporate bonds and high yield bonds ended the week mixed at 5.1% and 8.5%, respectively.

Economic data for the week was mostly overshadowed by the mid-week inflation reading but lent to mixed results. The NFIB small-business index decreased to 90.1 in March but was still above the 89.0 consensus forecast. The U.S. consumer price index rose a meager 0.1% in March, largely due to lower energy costs, as the yearly inflation rate fell to its lowest level since May 2021 at 5.0%. U.S. wholesale prices fell 0.5% in March, marking its biggest decline in almost three years and potentially signaling further easing in inflation in the coming months. U.S. retail sales declined by 1% in March, falling for the fourth time in the past five months, reflecting a slowdown in the economy as consumer-spending habits are shifting. U.S. consumer sentiment rose to 63.5 from 62 in April, rebounding from a four-month low, but Americans expressed more anxiety around higher inflation. In Europe, the United Kingdom's economy appeared to skirt the Bank of England's forecast for a recession in the first quarter as the revision to January's GDP showed 0.4% growth.

See it by the numbers.

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