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Losing Traction – The major U.S. indexes fell for the fifth week in a row after a rapid shift in sentiment sent stocks reeling on Thursday. On Friday, an employment report showed that the economy generated 428,000 jobs in April, and the major indexes ended up with relatively modest weekly declines: -1.5% for the NASDAQ and about -0.2% for the S&P 500 and Dow.

3.00% + Yields – Prices of government bonds fell, sending the yield of the 10-year U.S. Treasury Bond surging late in the week. The yield jumped from 2.92% to 3.07% on Thursday before climbing to 3.13% on Friday, the highest level since November 2018. As recently as mid-2020, the yield was around 0.50%.

GDP Speed Bump? – The U.S. economy reversed course in this year’s first quarter when it shrank at an annual rate of 1.4% after posting full-year growth of 5.7% in 2021. While many economists believe the first-quarter setback was temporary, it marked the worst quarterly GDP result since the second quarter of 2020, when the pandemic triggered a brief recession.

Top News to Watch this Week
Price Check – A Consumer Price Index report scheduled to be released on Wednesday will show whether the U.S. economy got any relief in April from surging inflation. A month earlier, the government reported that inflation accelerated in March at an 8.5% annual rate, the highest since 1981-eclipsing the previous month’s 7.9% figure.

If you are in the Indianapolis area and looking for financial advice we are happy to have the meeting with you in person at our offices in Carmel, Indiana, by Zoom or over the phone. Visit our “Schedule An Appointment” page and book a 15-minute “Relationship Building Call” to start the process. The goal during this brief conversation is to understand what your unique goals and objectives are and whether or not Crown Haven can serve as an ideal fit to help.

Top News Of Last Week

April Showers – There was no relief for the stock market in April on the heels of a tough first quarter. The major indexes were all down for the month, with the NASDAQ sustaining the biggest decline at more than 13%-its worst month since October 2008-amid broad weakness for technology stocks. The S&P 500 was down nearly 9% and the Dow almost 5%

Dollar in Demand – The U.S. dollar’s value versus a basket of other major currencies climbed on Thursday to the highest level since March 2020, when the coronavirus pandemic sent stocks plummeting and investors piling into the dollar. The greenback has surged this year amid a diminished outlook for the global economy and policy tightening by the U.S. Federal Reserve.

GDP Speed Bump? – The U.S. economy reversed course in this year’s first quarter, when it shrank at an annual rate of 1.4% after posting full-year growth of 5.7% in 2021. While many economists believe the first-quarter setback was temporary, it marked the worst quarterly GDP result since the second quarter of 2020, when the pandemic triggered a brief recession.

Top News Of The Week

Fed Ahead- In addition to a monthly jobs report scheduled to be released on Friday, the new week’s agenda includes a policy meeting of the U.S. Federal Reserve that concludes on Wednesday. Policymakers are widely expected to approve an interest-rate increase of half a percentage point-twice as big as the quarter point increase approved in mid-March.

If you are in the Indianapolis area and looking for financial advice we are happy to have the meeting with you in person at our offices in Carmel, Indiana, by Zoom or over the phone. Visit our “Schedule An Appointment” page and book a 15-minute “Relationship Building Call” to start the process. The goal during this brief conversation is to understand what your unique goals and objectives are and whether or not Crown Haven can serve as an ideal fit to help.

Here is the April, 25th edition of the Weekly Wealth Management Insights update from Crown Haven Wealth Advisors, Indiana’s #1 independent and fiduciary full-service firm.

Q1 GDP Ahead – A report scheduled to be released on Thursday will show whether the U.S. economy’s strong late 2021 momentum carried over into early 2022. The government will release its initial estimate of first-quarter GDP growth. In the previous quarter, the economy expanded at an annual rate of 6.9%; for full-year 2021, the rate was 5.7% on an inflation-adjusted basis-the fastest growth since 1984.

Peak to Valley – A strong start wasn’t enough to prevent the major U.S. stock indexes from falling for the third week in a row, resulting in declines of around 2% to 4%. The market had been on track for a positive week until Thursday morning, when stocks began a steep descent that extended into Friday amid further signs of tightening monetary policy.

Half-Point Hike? – It’s looking increasingly likely that the U.S. Federal Reserve will accelerate the pace of its interest-rate increases, based on public comments Thursday from Jerome Powell. The Fed chair said the central bank is likely to raise its benchmark rate by a half percentage point at its meeting on May 4. It’s more typical for the Fed to raise rates by a quarter point at a time, as it did in its March meeting.

U.K. Anxiety – A British stock index fell 1.4% on Friday and the pound dropped to its lowest level against the U.S. dollar since 2020. The moves came after a government report showed that U.K. retail sales fell by 1.4% in March. In addition, British consumer sentiment tumbled to its second-lowest monthly reading since records began nearly 50 years ago.

If you are in the Indianapolis area and looking for financial advice we are happy to have the meeting with you in person at our offices in Carmel, Indiana, by Zoom or over the phone. Visit our “Schedule An Appointment” page and book a 15-minute “Relationship Building Call” to start the process. The goal during this brief conversation is to understand what your unique goals and objectives are and whether or not Crown Haven can serve as an ideal fit to help.

Earnings Time – A handful of major U.S. banks kicked off earnings season with mixed results. Overall, the biggest banks are expected to suffer from difficult year-over-year comparisons to the big profits they reported earlier in the recovery from the pandemic. As of Friday, analysts were forecasting that first-quarter earnings for banks in the S&P 500 fell 37% from a year ago, according to FactSet.

Modest Retail Gain – Despite high inflation, U.S. retail sales rose by 0.5% in March, although sales slipped 0.3% when excluding gasoline purchases. The latest overall increase marked the third consecutive monthly gain in retail sales, although February’s 0.8% figure was higher than March’s number.half-point, but instead approved a smaller quarter-point increase.

8.5% Inflation – The gap has widened again between actual inflation and the 2.0% figure that the U.S. Federal Reserve maintains as its target rate for helping to foster sustainable economic growth. The government on Tuesday reported that the Consumer Price Index jumped to 8.5% in March, up from 7.9% the previous month. March’s figure is the highest since 1981.

Mortgage Stress – Entering the spring and summer homebuying seasons, potential buyers are facing a steep rise in mortgage financing costs, which could cool the housing market. The average interest rate for a 30-year fixed-rate mortgage climbed to 5.00% in the latest weekly report from the government mortgage company Freddie Mac. That’s the highest level since early 2011, and up sharply from just 2.65% as recently as January 2021.

Top News to Watch This Week

Inflation Checkup – A Consumer Price Index report scheduled to be released on Tuesday will show whether the U.S. economy got any relief in March from surging inflation. A month earlier, the government reported that inflation accelerated in February at a 7.9% annual rate the highest in four decades-eclipsing the previous month’s 7.5% figure.

Weekly Wealth Management Insight

Fed Outlook – Wednesday’s release of minutes from the U.S. Federal Reserve’s mid-March meeting showed that policymakers discussed the possibility of raising the Fed’s benchmark interest rate by a half-percentage point at a meeting scheduled early next month. At the recent meeting, officials considered raising the rate by a half-point, but instead approved a smaller quarter-point increase.

Tight Labor Market – With the U.S. unemployment rate at just 3.6%, initial applications for unemployment benefits are also dropping to unusually low levels. Thursday’s latest weekly count of unemployment claims fell to 166,000-the lowest weekly figure since 1968, and down 5,000 from the previous week.

Earnings Slowdown – Relative to recent quarters, expectations are low heading into earnings season, which opens this week as major banks begin reporting first-quarter results. As of Friday, analysts surveyed by FactSet were expecting companies in the S&P 500 to post earnings increases averaging 4.5% compared with the same period a year earlier. If the growth rate ends up close to that figure, it would mark the first time in two years that quarterly earnings growth fell short of 10%.

Top News to Watch This Week

Longer-Term View – Although Wall Street analysts have recently scaled back their expectations for quarterly earnings reports that begin coming out this month, they’ve been raising their forecasts for the rest of the year, according to FactSet. In January through March, analysts cut their first-quarter earnings estimates for companies in the S&P 500 by 0.7% while lifting them for the subsequent three quarters by 1.6%, 2.4%, and 3.9%, respectively.

Weekly Wealth Management Insight

Running in Place – Stocks started the week on a positive note but reversed course on Wednesday and Thursday, leaving the major U.S. indexes little changed overall. At the market’s weekly peak on Tuesday, the three major U.S. indexes had fully recovered the losses experienced since the beginning of Russia’s invasion of Ukraine in late February.

Yield Curve Inversion – For the first time since 2019, the yield curve inverted, as the yield of the 2-year U.S. Treasury bond rose above the yield of the 10-year bond. Such an inversion is an indicator of concerns about short-term interest-rate increases as well as the possibility that a recession could loom ahead.

Jobs Momentum – The 431,000 jobs that the U.S. economy generated in March marked the eleventh month in a row that gains have exceeded 400,000-the longest such stretch of growth in records dating to 1939. The unemployment rate fell to 3.6% from 3.8% ; wage growth rose to 5.6%.