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Market Recap
WEEK OF MAR. 27 THROUGH MAR. 31, 2023
The S&P 500 closed in the green for a third straight week amid easing pressures on the banking sector coupled with rising energy prices.
The index closed 3.5% higher at 4,109.31 from last week's level of 3,970.99 with every sector in positive territory. For the month of March, the index increased more than 3% led by gains in the technology and communication sectors.
The S&P 500 was up 7% in the first three months of the year despite concerns about ongoing rate increases by the Federal Reserve and contagion from the collapse of Silicon Valley Bank.
The collapse of Silicon Valley Bank and Signature Bank (SBNY) continued to reverberate through the global banking system as the sector limped into the start of the week. Confidence was restored Monday when First Citizens BancShares (FCNCA) agreed to acquire the former assets of SVB, and was amplified by the likelihood that the Fed would expand its emergency lending facility. The financial sector added another 3.7% to the previous week's 0.5% gain.
Fueled by higher oil prices on heightened geopolitical tensions tied to overtures by Russia to place nuclear weapons in Belarus and Iraq's suspension of exports from the Kurdistan region, the energy sector was the top-performing sector of the S&P 500 with a gain of 6.2%. Schlumberger (SLB) took the top spot with a gain of about 10%, followed by Devon Energy (DVN) which was up almost 9% from last week's close.
Material stocks were higher by 4.9%, followed by a 4.4% gain in the industrial sector with the airlines all grabbing the top spots. Airline industry research underpinned the sector with forecasts for active summer travel and higher airline fares.
The real estate sector rose another 5.2% this week led by gains in Boston Properties (BXP) and Simon Properties (SPG) while consumer discretionary was up 5.6% from outsized gains in Caesars Entertainment (CZR) and Carnival (CCL), with Carnival gaining an upgrade by Susquehanna to positive from neutral.
A mid-week rotation back into tech stocks left the entire sector up 3.4% for the week amid signs of resilience in business spending on technology and easing interest rate pressures. Hewlett Packard Enterprises (HPE) unveiled its latest gaming hardware and software lineup this week, driving shares to their highest level in nearly a month.
Consumer staples closed the week 2.5% higher, followed by a 1.8% gain in healthcare stocks. Communication services ended with a 1.5% gain as losses in Google (GOOG) were offset by a 10% gain in Paramount (PARA).
Consumer confidence improved, fourth quarter GDP was revised slightly lower, and a key inflation metric for the Federal Reserve, the PCE deflator, rose less than expected last month, mitigating forecasts for rate increases.
Next week kicks off with manufacturing PMIs and construction spending, followed by job openings and private payroll data, and ending Friday with the pivotal labor market report. The consensus estimate among economists suggests the economy created 240,000 new jobs in March, while the unemployment rate is expected to remain unchanged at 3.6%.
