U.S. equity markets lost ground for the first time since January in a week that represented the eighth anniversary of the best buying opportunity in your lifetime, March 2009. A strong February jobs report was not enough good news to counter concerns about falling oil prices and their impact on energy stocks. Also weighing on stocks and interest rates is the near certain Fed rate hike at this week’s FOMC meeting.

Your Weekly Anecdotes:

  • Oil prices fell sharply last week to their lowest level of the year on concerns of a global oil glut. EIA reported that U.S. crude stockpiles rose a ninth consecutive week to a record 528.4 million barrels. U.S. production is pointing higher while the OPEC production cut is unclear beyond mid-2017. Last week, the Baker Hughes rig count registered its 8th consecutive week of gains to an 18-month high.
  • The ECB met last week and, as expected, did not alter its monetary policy or QE target. Despite a recent surge in the Eurozone’s inflation rate (2%), Mario Draghi’s statement was somewhat dovish, commenting that “there is no sign of a convincing upward trend in underlying inflation.”
  • Senate Majority Leader Mitch McConnell (R-Ky.) cast doubt on Congress’s ability to complete a tax reform deal before the August recess.
  • WH spokesman Spicer on Thursday said DJT is committed to restoring Glass-Steagall. Banks tumbled on the news, dragging the broad indices lower with them.
  • The Wall Street Journal reported that January insider buying activity of only 279 filings was the lowest level on record dating back to 1988.
  • While small caps have outperformed since the election, their relative strength to the large caps has waned. The Russell 2000 is trading at the same levels as early December.
  • Volatility in Euro common currency spiked last week on news that former Prime Minister Alain Juppe would not stand in the race to replace scandal-hit Francois Fillon. This increases the odds of a victory by Marine Le Pen, the leader of the National Front far-right party who has promised to put a ‘Frexit’ vote to the public should she win the election.

Your Weekly Economic Updates:

  • February non-farm payrolls grew by 235,000, handily beating estimates for 200,000. This brought the unemployment rate down to 4.7%. The labor force participation (the percentage of the population that is working or actively seeking work) rose 0.1% to 63.0%, a level not seen since September 2013.
  • The February jobs report also showed the “U-6” unemployment rate, which includes discouraged or part-time workers who would prefer a full-time position, fell to 9.2%, near pre-recession lows and down sharply from a peak of 17.1% during the financial crisis.
  • Wage growth remained somewhat muted despite the strengthening labor market; average hourly earnings rose 0.2% compared to January, and 2.8% year over year.
  • January [final] wholesale inventories declined 0.2%, the weakest reading since Feb 2016. This will likely result in many economists lowering their Q1 GDP forecasts – incidentally, the Atlanta Fed lowered its Q1 GDP estimate to 1.2% this week – their initial estimate was 2.3% back in late January.