The March employment report showed a sizeable gain in payroll employment, indicating that the jobs market may have turned the corner. But don’t expect unemployment to drop quickly. Nonetheless, the recovery appears to be taking hold even though by sectors it is very uneven. Once again, this week’s data show that manufacturing is doing just fine while construction is struggling.
Recap of US Markets
This past week, news on the economy actually had the most impact on equities as sovereign debt issues did not gain as much attention as in recent weeks. At the start of the week, nominally strong personal consumption numbers boosted stocks along with a favorable report on consumer and business confidence in Europe. Equities edged up further on Tuesday after home prices were reported up and U.S. consumer confidence was a little better than expected.
At mid-week, an unexpected drop in private payrolls according to ADP led to a sharp pullback in equities, abetted by a below expectations Chicago PMI. The mid-week selloff was a disappointing way to end a relatively healthy first quarter. But there were no April Fool’s antics on Thursday as the bulls were back based on a dip in jobless claims and a stronger-than-expected ISM manufacturing index.
Equity markets were closed Friday for Good Friday observance but futures were up on the better-than-expected private sector jobs numbers in the March employment report.
Equities were up this past week. The Dow was up 0.7 percent; the S&P 500, up 1.0 percent; the Nasdaq, up 0.3 percent; and the Russell 2000, up 0.7 percent.
For March, major indexes are up as follows: the Dow, up 5.1 percent; the S&P 500, up 5.9 percent; the Nasdaq, up 7.1 percent; and the Russell 2000, up 8.0 percent.
For the first quarter of 2010, major indexes are up as follows: the Dow, up 4.1 percent; the S&P 500, up 4.9 percent; the Nasdaq, up 5.7 percent; and the Russell 2000, up 8.5 percent. Major indexes have been up for four consecutive quarters.
For the year-to-date (one more trading day beyond the first quarter), major indexes are up as follows: the Dow, up 4.8 percent; the S&P 500, up 5.6 percent; the Nasdaq, up 5.9 percent; and the Russell 2000, up 9.4 percent.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.