April 15, 2023

Weekly Market Commentary April 10th to April 14th 2023

The main economic data releases this week focused on inflation and consumption, with CPI- Consumer Price Index, PPI- Producer Price Index, and Retail Sales. All of these data points provided bits of optimism that the FOMC’s actions to combat inflation may be gaining traction.

CPI was the first inflation figure release of the week which came in lower at 0.1% Month-over-Month for March compared to 0.4% in February. Similarly, CPI excluding Food and Energy MoM declined to 0.4% for March from 0.5% for February. The main contributing factors were a 1.5% increase in Medical Commodities and a 4.0% increase in Airfares.

The CPI Year-over-Year for March was reported at 5.0%, down from 6.0% the month prior. The majority of this decline is due to the energy price increase resulting from Russia’s invasion of the Ukraine no longer distorting the numbers. However, the CPI excluding Food and Energy YoY ticked up to 5.6% in March from 5.5% in February.

PPI numbers were released later in the week. PPI MoM for March was reported at negative 0.5% compared to negative 0.1% in February. The most significant components included Energy prices down 6.4% and Transportation down 1.3%. PPI excluding Food and Energy MoM was also down for March coming in at negative 0.1% versus 0.0% in February.

Traders focused on Retail Sales figures at the end of the week. Retail Sales in March were negative 1.0% with February’s number being revised slightly higher to negative 0.2%. The decline is mainly attributed to a 5.5% decrease in Gasoline Station sales and a 2.5% decrease in Department Store sales.

Stocks closed higher for the week. The S&P 500 was up 0.80% finishing the week at 4,138, while the Nasdaq increased 0.29% to 12,123 and the Dow Jones Industrials rose to 1.19% at 33,885. The 10-year Treasury yield jumped to 3.52% this week from 3.39% at the end of last week.

Next week’s data releases are relatively light with a housing and regional manufacturing theme.

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