Weekly Market Commentary – April 14, 2022

The consumer price index (CPI) rose 1.2% in March (+8.5% y/y), led by an 18.3% increase in gasoline (+48.0% y/y) and a 1.0% rise in food prices (+8.8% y/y). Ex-food and energy, the CPI rose 0.3% (+6.5% y/y). The price index for durable goods (13.1% of the CPI) fell 0.9% (+17.4% y/y), largely reflecting a 3.8% decline in the index for used cars and trucks (still up 35.3% y/y). The price index for non-energy services (57.2% of the CPI) rose 0.6% (+4.7% y/y), partly reflecting a 2.0% increase in transportation services (+7.7% y/y). The producer price index rose 1.4% (+11.2% y/y). Import prices jumped 2.6% (+12.5% y/y), reflecting a 16.1% increase in petroleum prices (+66.5% y/y).

Retail sales rose 0.5% in March (+6.9% y/y), led by an 8.9% gain in gasoline sales (reflecting higher prices). Ex-autos, sales fell 0.3%. Monthly figures are subject to significant noise (annual benchmark revisions are due April 25), but spending for the first quarter was strong – seasonally adjusted sales rose at a 17.7% annual rate in 1Q22/4Q21, while unadjusted sales rose 12.4% in , well ahead of inflation.

Next week: nothing critical on the economic calendar. Residential construction figures will be subject to seasonal noise but are likely to reflect ongoing supply constraints. The Fed’s Beige Book, the summary of anecdotal conditions from around the country, should show tight labor market conditions and elevated inflation pressures.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Treasury Yield Curve – 4/14/2022

S&P Sector Performance (YTD) – 4/14/2022

Economic Calendar

All expressions of opinion reflect the judgment of the author and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor’s returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business April 13, 2022.

(Eric Sams, CFP®)
(CERTIFIED FINANCIAL PLANNER ™)