Most major market indices ended the week with significant gains, except for the Russell 2000 small cap index which ended modestly lower.  The week saw extreme volatility.  On Monday, the Dow Jones Industrials saw a 2600-point swing after misreporting by several X accounts that Director of the National Economic council, Kevin Hassett said that a 90-day pause in tariffs may be considered.  That was later denied by the White House causing markets to close significantly down.  Stocks seesawed again on Tuesday fluctuating between large gains and losses but ending lower by day’s end.  Then on Wednesday, stocks soared with a huge relief rally following the announcement of a pause on reciprocal tariffs on all countries except China.  The S&P 500 had its fourth largest percentage gain since World War II on Wednesday.  However, on Thursday the markets gave back realizing that 145% tariffs remain on most goods from China which has enacted reciprocal tariffs against us.  Also, all other countries still have an increased 10% tariff on imports.  Traders ignored the surprising monthly decline in the consumer price index realizing, if not resolved, it will likely drive-up inflation in coming months.  On Friday stocks rose again giving the S&P 500 its biggest weekly gain since November 2023.

The Federal Reserve released the minutes from its March meeting, which reinforced its concern over economic uncertainty and the need for a cautious approach to further rate moves.

Treasury bond yields rose sharply with the 30-year bond yield at 4.867% and the 10-Year note at 4.484%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.62%.  Crude oil fell to $61.32 a barrel and natural gas fell to $3.495 per MMBTUs.  The U.S. dollar index fell sharply to 100.14 and gold soared to $3244.60 an ounce.

As we look forward to next week, we should start to see the start of Q1 earnings releases.

In economic reports this week:

• The Federal Reserve reported that consumer credit fell 0.2% in February. 
  • Revolving credit rose 0.1%.
  • Non-revolving credit fell 0.3%.
• The Treasury Department reported a deficit of $161BN in March and a cumulative deficit of $1.307TN since the beginning of the fiscal year on October 1^st.

                Source: T.S. Treasury Department

• The Commerce Department reported:
  • Wholesale inventories increased 0.3% in February.
• The Labor Department reported:
  • The consumer price index fell 0.1% in March and was up 2.4% from last March.
    • Excluding volatile food and energy, the CPI rose 0.1% and was up 2.8% year over year.
    • The biggest increase in March was for household natural gas at 3.6%.
    • The biggest decrease was in gasoline at -6.3%.

                Source:  U.S. Department of Labor

                Source:  U.S. Department of Labor

• • The Producer Price Index for final demand fell a seasonally adjusted 0.4% in March and was up 2.7% from a year ago.
    • Excluding volatile food and energy, producer prices rose 0.1% and were up 3.4% from a year ago.

                        Source: U.S Department of Labor

• • Seasonally adjusted first-time claims for unemployment were 223,000, a decrease of 4,000 from the previous week’s unrevised level.  
    • The 4-week moving average of claims, designed to smooth out volatility, was 223,000, unchanged from the previous week’s unrevised level.
    • For the full unemployment report go here:  https://www.dol.gov/ui/data.pdf
• The EIA weekly oil report is here: Weekly Petroleum Status Report.  Also, the EIA reported in the prior week:
  • Field production of crude oil fell from 13.580MM BPD to 13.458MM BPD.
  • Natural gas storage rose 57BN cubic feet and was below its average level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs dropped 9 to 480 and the number of natural gas rigs rose 1 to 97.

Please call us if you have any questions.

Loren Rex – Emeritus

Erik A Smith, AIF® – President & C.E.O.

These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).

Sources:

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

https://ir.eia.gov/ngs/ngs.html

https://www.freddiemac.com/pmms

https://www.wsj.com/market-data?mod=nav_top_subsection

https://bakerhughesrigcount.gcs-web.com/na-rig-count

https://www.census.gov/economic-indicators

https://www.bls.gov/news.release/pdf/cpi.pdf