Markets “In a Nutshell” for May 9, 2022
Investment Week at a Glance
Stocks finished lower for the week. The Dow Jones Industrial Average fell 0.20%, the S&P 500 was down 0.20%, and the NASDAQ fell 1.50%. Foreign stocks (MSCI EAFE) were also down, falling 2.00%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 3.13%. (Data source: Wall Street Journal)
Fed Raises Rates
The Fed raised rates by 0.50% last week as expected. This is the first-rate hike larger than the typical 0.25% in 22 years. The market had little reaction to this rate hike as it was already priced in but the market did bounce when Fed Chair Jerome Powell somewhat dismissed the thoughts of a 0.75%. The market however is still pricing in a 0.75% rate hike at the next Fed meeting in June. With this most recent rate hike, the 10-year yield is now above 3% and on its way to 3.2% as we open the week. This is one reason for market volatility picking up recently and many expect this to continue with the uncertainties ahead for the market and economy.
The April jobs report was also released last week, the report showed an increase of 428k jobs for the month of April. That number makes it 12 consecutive months with more than 400k jobs added as the unemployment number has now fallen to 3.6%. A far way from the peak unemployment we saw exactly 2 years ago in April of 2020 which was 14.8%. With job growth being strong and demand continuing to be strong inflation continues to be the main worry for the market going forward. The new reading for CPI (consumer price index) is set to be released on Wednesday and will be much anticipated as people will want to see if inflation is slowing or if we continue to see higher inflation than the previous month.
How many job openings are there in the United States currently? (Scroll Down for Answer)
Have a Great Week!
1. 11.5 million, there are only about 6 million people currently looking for jobs currently. This is another contributor to inflation as companies are having to raise wages to bring workers in as demand is continuing to be strong but there is a labor shortage.