Blog Post

Stocks End the Week Lower As Traders Focus Earnings the Tight Labor Market

Major market indices ended the week lower as the market was largely driven by corporate earnings announcements but also, the likelihood of additional FED rate hikes.

Some FED members indicated that more interest rate hikes will be required following the robust January jobs report.  Quarter percent increases are expected now in both March and May.

Russia announced it was cutting oil production by another 500,000 barrels per day due to sanctions.  While the price of crude exports has been capped, new sanctions have started targeting refined products from Russia.  This is likely to keep diesel, heating oil and jet fuel prices high relative to gasoline as Russia’s exports of these distillates will impact world markets.

Treasury bond yields were rose with the 30-year bond at 3.825% and the 10-Year note at 3.740%.  30-year mortgage rates rose to 6.12%.  Crude oil rose to $79.80 a barrel and natural gas rose to $2.571 per MMBTUs.  The U.S. dollar index rose to 103.58 and gold fell to $1874.70 an ounce.

  • China reported:
    • Consumer prices were up 2.1% year-over-year in January, up from 1.8% in December.
    • Producer prices were down 0.8%, more than the 0.7% year-over-year decrease in December on weaker demand for exports.
  • The U.K. announced that gross domestic production was unchanged in the fourth quarter following a revised 0.2% decline in the third quarter.
  • The nonpartisan Congressional Budget Office reported that for the first four months of the fiscal year (beginning October 1st) , the budget deficit was $459BN, up $200BN from the first four months of the prior fiscal year.
  • The Commerce Department reported that the U.S. trade deficit grew 10.5% in December.
    • Imports rose 1.3% and exports fell 0.9%.
    • For the year of 2022 the deficit grew 12.2%.

  • The Labor Department reported:
    • Seasonally adjusted first-time claims for unemployment were 196,000, up from 183,000 in the prior week.
      • The 4-week moving average of claims, designed to smooth out volatility, was 189,250 down from 191,750 in the prior week.
      • For the full unemployment report go here: .
  • The EIA weekly oil report is here: .  Also, the EIA reported in the prior week:
    • Field production of crude oil rose from 12.2 to 12.3MM BPD.
    • Natural gas storage fell 217BN cubic feet and is above the 5-year average at this time of year.
  • Baker Hughes reported the number of active oil rigs rose 10 to 609.  The number of active natural gas rigs fell 8 to 150.
  • Factset reported, with 69% of S&P500 companies reporting, that the blended earnings decline was 4.9%.

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Thank you,

Loren C. Rex, CFP®, MA                                                                     Erik A Smith, AIF®

Founder / Emeritus                                                                            President & C.E.O.                                  269-441-4143                                                                                    517-795-2025

Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.

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.


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