Market Recap - Week Ending April 7, 2023

The Broader Economy

The week ended in mixed fashion with the Dow gaining only 211 points for the week, the S&P eking out a mere 0.10%, and the Nasdaq pulling back 0.90%

This week, the focus shifted to the labor market as a multitude of economic indicators, the majority of which suggested a deceleration in economic growth, dampened the expansion narrative that numerous investors were anticipating.

The March Jobs Report showed us an increase of 236,000, falling short of the Dow Jones prediction of 238,000 and below the revised February figure of 326,000.

Additional employment data released this week indicates a potential deceleration in hiring. ADP reported that private sector jobs increased by 145,000 in March, falling short of the anticipated 200,000, while the year-over-year wage growth measured by ADP slowed to 6.9% from 7.2%.

Concurrently, the February JOLTS Report revealed a decline of 632,000 job openings to 9.93 million in February, down from 10.56 million in January. This represents the lowest number of job openings since May 2021.

In summary, the current investor sentiment suggests that we might be witnessing the early stages of a transition from cyclical to defensive exposures in the market.

Gold and Silver

Gold shot up 1.85% for the week, rising as high as $2,049 an ounce, and ending the week at $2,023 an ounce. Silver was the big gainer, having risen 3.69% for the week, settling at $25 an ounce on Friday.

Over the last thirty days, gold has risen by 8.5% and silver by 17%. Many are questioning if this signifies the highly anticipated breakout in precious metals. Experts predict breakout rallies in COMEX gold and silver for 2023, which might have already begun or could be a few weeks away.

Most emphasize that timing is only crucial if one isn't prepared before the event. Therefore, he advises individuals to assess the situation, study history, draw their own conclusions about the future direction, and prepare accordingly. Plus, it helps to monitor critical indicators to get a better read on fundamental and technical factors influencing both markets.

China continues its gold-buying spree for the fifth consecutive month, adding 18 tonnes to its reserves in March. This move highlights the country's ongoing efforts to diversify its foreign exchange reserves and reduce its reliance on the US dollar. The steady increase in gold purchases further underscores China's commitment to strengthening its financial position amid global economic uncertainties.

The Week Ahead

Inflation takes up the spotlight next week as the Consumer Price Index (CPI) and Producer Price Index (PPI) are slated for release on Wednesday and Thursday, respectively. Friday will also give us US Retail Sales, Industrial Production, and Consumer Sentiment. Peppered in between these release are a number of presentations by Federal Reserve member starting Tuesday..