Week of April 3, 2023

The market finished the last trading day of the first quarter of 2023 on a high note following the release of the Federal Reserve’s (Fed) preferred inflation gauge, the Personal Consumption Expenditure (PCE) report. The PCE report, released Friday, showed a small increase for the month of February. Core PCE (excluding volatile food and energy) increased 0.3% for the month, below the 0.4% Dow Jones estimate and lower than the 0.5% increase in January.

All three major indices were up for the month of March and for the first quarter of 2023. For the month, the Dow, S&P 500, and the Nasdaq increased 1.9%, 3.5%, and 6.7%, respectively. For the quarter, the Dow rose 0.4% and the S&P 500 finished up 7%. The tech-heavy Nasdaq had the best performance of the three, finishing the quarter up 16.8%.

Following the recent bank runs and turmoil throughout the industry, the energy sector is now faced with some uncertainty. OPEC+ announced they would be slashing output by 1.16 million barrels of oil per day. Oil prices spiked on Monday after the unexpected announcement - with Brent crude, the global benchmark, jumping 5.31% for the day and West Texas Intermediate (WTI), the U.S. benchmark, rose 5.48%.

On Tuesday, the recent job openings report fell to a 21-month low of 9.9 million in February. This indicates that the labor market is cooling amid the Fed’s fight against inflation. Job listings also declined, dropping 10.6 million in January – the fewest since October 2021. The number of job openings is often viewed as a sign of the health of the labor market, which has been extremely tight over the past year. “The labor market is still very hot,” said chief economist Bill Adams of Comerica. “But the big drop [in job openings] is a sign the labor market is cooling in general.”