Economic Data and Market Highlights
Global stocks advanced for the week with the MSCI World rising 53 basis points as European stocks advanced 2.46%. The Nikkei 225 and the S&P 500 jumping which are up 18.67% and 7.73% year to date, took a step back this past week falling 0.56% and 0.23% respectively. Consumer discretionary, information technology and communication services names, the three sectors dominated by the Magnificent Seven, fell this week 2.58%, 1.67%, and 0.66%. Materials, real estate, and energy all rose for the week (1.60%, 1.55% and 1.20%).
The US jobless rate rose to a two-year high in February even with strong hiring. Nonfarm payrolls climbed by 275,000 last month compared to a decline of 167,000 in the two months prior. Economists had estimated growth of 198, 000. Despite the growth, US unemployment inched upwards to 3.9%, higher than expected. Wage growth slowed more than expected and the January revision downward was more than expected from 0.6% to 0.5%.
February’s job losers rose to its highest since November 2021 as indicated by the blue line in the chart below.
- German equities hit a new high on Thursday but GDP divergence between Germany, Europe’s largest economy, and the US widen as US GDP forecasts increase versus falling GDP forecasts for Germany per Apollo data.
The 10 largest stocks within the S&P 500 now account for roughly 33% of S&P 500 market cap and 25% of earnings per Goldman Sachs data.
Nvidia faced unprecedented volatility Friday, trading up 5.1% during the morning and ultimately falling more than 4% throughout the rest of the day. The last time Nvidia was up 5% intra-day and ended the session lower was January 27th, 2022. Semiconductor stocks have been on a tear as of late, trading up day after day, and this is unsustainable, with some analysts pointing to algorithmic trading as a recent for the sharp initial selloff. Meanwhile, the broader chip market pulled back throughout the day with Broadcom, AMD, and Marvell Technology Inc falling throughout trading hours.
As equity markets continue to rise, so to do the market newsletters. To that end, we’re seeing the most bullish sentiment since 2017.
Authors:
Jon Chesshire, Managing Director, Head of Research
Michael McNamara, Analyst
Sam Morris, Analyst
Data Source: Apollo, Barron’s, Bloomberg, BBC, Charles Schwab, CNBC, the Daily Shot HFR (returns have a two-day lag), Goldman Sachs, Jim Bianco Research, J.P. Morgan, Market Watch, Morningstar, Morgan Stanley. Pitchbook, Standard & Poor’s and the Wall Street Journal.