{"id":6718,"date":"2023-04-11T12:12:25","date_gmt":"2023-04-11T18:12:25","guid":{"rendered":"https:\/\/www.keystonefinancial.com\/?post_type=oi_article&p=6718"},"modified":"2023-04-11T12:12:26","modified_gmt":"2023-04-11T18:12:26","slug":"market-commentary-april-11-2023","status":"publish","type":"oi_article","link":"https:\/\/www.keystonefinancial.com\/articles\/market-commentary-april-11-2023","title":{"rendered":"Market Commentary | April 11, 2023"},"content":{"rendered":"\n
Ambiguous images.<\/p>\n\n\n\n
Some illustrations are optical illusions. When two people view the picture, they may see completely different images. A good example is Rubin\u2019s Vase. One viewer may see a vase, while another sees two faces.<\/p>\n\n\n\n
Current economic conditions can be interpreted in different ways, too. Recent economic data and a possible credit crunch, resulting from upheaval in the banking sector, suggest growth is slowing. After viewing the data, some say we\u2019re heading for a soft landing, and others say a recession is coming. Here is the recent data:<\/p>\n\n\n\n
Consumer spending. This is the main driver of economic growth in the United States. While Americans are still buying, the pace of spending slowed in February, according to a late-March report from the Bureau of Economic Analysis. Less spending means lower demand for goods and services \u2013 and that effects production.<\/p>\n\n\n\n
Production of goods and services. Last week, the Institute for Supply Management reported that activity in the manufacturing sector \u2013 automakers, food producers, pharmaceutical companies and other companies that make products \u2013 shrank for the fifth consecutive month. Activity in the services sector \u2013 airlines, banks, building maintenance and other companies that provide services \u2013 continued to expand but at a slower pace.<\/p>\n\n\n\n
Employment. The employment report indicated the labor market in the U.S. remained resilient and jobs growth was solid in March. It\u2019s notable that there were fewer job openings and more Americans returned to the workforce. The unemployment rate remained steady at 3.5 percent. In addition, average hourly earnings edged higher, according to the U.S. Bureau of Labor Statistics.<\/p>\n\n\n\n
Randall Forsyth of Barron\u2019s reported, \u201cThe solid employment report for March further raises the odds that the U.S. economy is headed for a proverbial soft landing.\u201d Not everyone agrees.<\/p>\n\n\n\n
Economist and former Treasury Secretary Lawrence Summers gives more weight to manufacturing and services data than employment data. He also pointed to the Dallas Federal Reserve\u2019s Banking Conditions Survey, which showed lending volumes declined sharply in March. Summers told Bloomberg\u2019s Wall Street Week with David Westin:<\/p>\n\n\n\n
\u201cEmployment and unemployment are lagging indicators of what\u2019s happening in the real economy\u2026There is some substantial amount of constriction in credit. If you looked at the forward-looking numbers this week from the PMI surveys, those numbers were quite weak\u2026Recession probabilities are going up at this point. The Fed has a very, very difficult decision ahead of it.\u201d<\/p>\n\n\n\n
Major U.S. stock indices finished the week with mixed results, reported Carleton English of Barron\u2019s. In the Treasury market, yields on many shorter-maturity increased, while yields on longer-maturities fell.<\/p>\n\n\n\n