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Weekly Market Recap: April 3, 2023

Weekly Market Recap: April 3, 2023

Posted April 3, 2023 at 10:15 am
J.P. Morgan Asset Management

The week in review

  • Case-Shiller U.S. HPI composite: -0.4% m/m
  • Consumer confidence: 104.2 vs 101 expected, up from 103.4
  • Initial jobless claims increased to 198k from 191k
  • Headline/Core PCE: 0.3%/0.3% m/m

The week ahead

  • JOLTS
  • Unemployment
  • PMI

Thought of the Week

Market volatility persisted during 1Q23, but several of 2022’s underperformers experienced a notable turnaround, highlighting investors’ willingness to look beyond near-term challenges and to front run a dovish shift in monetary policy.

From a performance perspective, international developed market equities led the way, bolstered by cheaper relative valuations and surprisingly robust earnings. Well-capitalized European financials benefited from the return to a positive interest rate environment, while industrials were propped up by lower-than-feared energy costs. Emerging market equities also experienced gains, rising by 4%, as China’s reopening looks set to benefit from consumers tapping into excess savings amassed during lockdown.

Turning to U.S. equities, large caps rose by 7.5% and small caps rose by 2.7%. This divergent performance can be attributed to the higher weight of financials and lower weight of technology in the small cap index relative to the large cap index. Amid the regional banking crisis, investors leaned into tech relative to financials, particularly as technology companies had already taken steps to optimize costs and defend margins. Turning to fixed income, the prospect of a dovish shift by the Fed in response to the banking crisis led yields to decline, with U.S. fixed income finishing the quarter up 3% and global high yield up 3.1%. Lastly, REITs edged up 1.5%, supported by a slight improvement in mortgage rates and modest declines in home prices; in contrast, commodities fell by 8%, primarily due to lower energy prices.

1Q 2923 asset class returns
Chart of the week and thought of the week sources

Originally Posted April 3, 2023 – Weekly Market Recap

Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be appropriate for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

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Disclosure: J.P. Morgan Asset Management

Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. International investing involves a greater degree of risk and increased volatility. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.

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