Stock markets returned to their winning ways last week after falling the previous week. The S&P 500 soared 3.5%. The global MSCI ACWI rose 2.8%, and the Bloomberg BarCap Aggregate Bond Index edged 0.1% lower. The moves higher in the S&P 500 and MSCI ACWI were both large enough to overcome last week’s losses.
Stock prices fell on the announced resignation of President Trump’s economic advisor, Gary Cohn, a free-trade advocate in the administration. However, after the Trump administration indicated allies may receive exemptions from recent tariffs, the potential flexibility reassured markets, and the job numbers announced at the end of the week propelled them to a very strong finish.
Key points for the week
- Stocks rose, more than making up for last week’s losses.
- U.S employers added 313,000 new jobs.
- A surge of people seeking work helped keep wage growth in check.
The U.S. employment report, released on Friday, portrayed an economy that continues to grow at a healthy pace. Employers added 313,000 jobs in February, easily surpassing expectations of 200,000. The chart above shows how broad the recovery has been. Nearly every sector saw increased hiring in February.
Such a strong number could have stoked fears about inflation. But wages increased only 0.1% last month and are up a healthy 2.6% over the last year. Instead, workers entered or reentered the labor force in large numbers, suggesting there is a pool of potential workers that can keep wage inflation at a moderate pace. While no report is perfect, this one contained lots of good news for investors.
Fun story of the week
Sometimes a witty observer does a better job of keeping risk in perspective than financial experts. Apparently, an out-of-control Chinese space station will come crashing back to earth around April 3, give or take a couple weeks. The station is believed to contain highly toxic chemicals, and there is a moderate probability it will crash into lower Michigan. While the story isn’t all that funny, commenters provided a few excellent examples of how to keep a healthy perspective and opine on the issues of the day. Two of my favorites:
“Yet more Chinese materials that flow into our country without a tariff.”
“And water quality in Flint remains unchanged.”
This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
S&P 500 INDEX
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
MSCI ACWI INDEX
The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 23 emerging markets (EM) countries*. With 2,480 constituents, the index covers approximately 85% of the global investable equity opportunity set.
Bloomberg U.S. Aggregate Bond Index
The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.