The S&P 500 closed fractionally higher for the week, extending its winning streak to a third week, as a last gasp to the upside made up for early losses that were tied to lingering concerns about a global recession and the ongoing conflict in Eastern Europe.
For the month, the S&P gained 5.2% in March with the utility sector outperforming with an 11% gain from the month prior. But for the first quarter, the S&P 500 was down 5.6%, making this the worst quarter for the index since 2020. An impressive 34% gain in the energy sector and 5% gain in utilities were overshadowed by losses in the other nine sectors.
Stocks were cautiously higher at the start of the week as Russia’s war again Ukraine and the siege of the port town of Mariupol continued to hold global financial markets captive.
Real estate was the top-performing sector within the S&P with a 4.43% gain for the week.
Utility stocks gained a collective 3.7%
The semiconductor sector gave back last week’s gains as investors rotated out of growth stocks and into value stocks amid concerns about a recession and COVID-related shutdowns that spread to China’s largest city, Shanghai.
Financials, which comprised the worst-performing sector of the week, were down 3.28% as a flattening yield curve undermines banks’ interest margins. Last week saw the yield between the 2-yr note and 10-yr note invert and end the week at a negative 8 basis point spread.
Last week’s second-tier economic data was eclipsed by the March labor market report which showed the economy added 431,000 jobs. The jobless rate declined to 3.6% while at the same time, wages rose for the twelfth consecutive month. This fueled expectations that the Federal Reserve will hike interest rates 50 basis points in May even as regional data showed signs of a slowing manufacturing sector.
This week’s calendar includes data on factory orders (Monday), trade balance (Tuesday), the S&P and ISM services sector PMIs (Tuesday) and the minutes from the March FOMC meeting at which the Fed raised rates by 25 basis points.
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