The Profit Margin: March 28, 2022
Statistic of the Week
Wages for American women are growing at a faster rate than men, however a large pay gap remains. From February 2020 to February 2021, women’s wages were up 4.4%, compared to men’s, up 4.1%. This is the widest margin on record going back to 1997.
Global Perspective
Consumers in Russia are feeling the full brunt of global sanctions. In the first 21 days of the war, inflation rose 6.8% in the country compared to 0.8% in the 21 preceding days. Furniture and household appliances have risen the most, followed by healthcare expenses. The only category virtually unchanged is transportation costs – dominated by fuel.
Market Moving Events
Tuesday: Case Shiller Home Price Index, Consumer Confidence Wednesday: GDP Revision Thursday: Jobless Claims, Personal Income and Spending, PCE Friday: Nonfarm Payrolls, ISM Manufacturing, Vehicle Sales
Commentary
Domestic equity markets continued their recovery rally last week and all three major US averages finished the week higher. The Nasdaq was the leader, rallying 1.98%.1 The S&P 500 moved 1.79% higher.2 And the DJIA, which has been a standout this year, inched up 0.31%.3 As equity prices moved higher, volatility edged lower, and fixed income yields rose. There was a sizeable leap higher in the yield of the 10-year Treasury during the week. By Friday, the yield had moved up 0.24% to finish Friday at 2.49%.4 Earnings and economic reports were relatively light last week, and there was no discernable reason for equity prices to move higher beyond that the selloff we had experienced at the start of the quarter that carried through the initial stages of the Russian invasion had been overdone to the downside. In the coming week, Thursday and Friday will have economic reports that carry the most weight. The Federal Reserve will be watching their favored inflation indicator on Thursday, the PCE. Friday’s nonfarm payrolls figure on Friday will also be closely followed. There is reported concern that initial jobless claims last week (chart right) signaled that the jobs market is too hot.5 (It doesn’t take much reasoning to get to that conclusion). For inflation to begin to cool, many economists argue that the labor market must first start to weaken. – Dan McElwee, CFP, ® MBA
Chart of the Week
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Sources
Statistic of the Week:
The Wall Street Journal
Global Perspective:
The Economist
Market Moving Events:
MarketWatch.com
Chart of the Week:
Haver, Clearnomics, Bureau of Labor Statistics, Department of Labor
Commentary:1.Bloomberg2.Bloomberg3.Bloomberg4.Bloomberg5.Investor’s Business Daily