Weekly Market Insights

April 14, 2022 Volume 9 Issue 15

Higher-than-expected readings on inflation, a mixed start to earnings season and continued geopolitical tension, weighed heavily on investor sentiment and pushed domestic equity markets lower for the week, with the tech heavy NASDAQ again underperforming the broader markets.

Weekly Highlights:

  • The cost of US goods and services rose sharply in March with the Consumer Price Index (CPI) climbing 1.2%, slightly above the gain of 1.1% expected by economists. Energy prices jumped 11%, led by an 18.3% spike in gasoline, while food prices rose 1%, led by a sharp gain in grocery prices. Core CPI, which excludes the cost of food and energy, rose 0.3%, the least in six months and slightly below expectations. On a y/y basis, CPI soared 8.5%, the most since December 1981, while core CPI was up 6.5%, its highest level since August 1982.
  • Additionally, the Producer Price Index (PPI), which measures prices paid by wholesalers, increased 1.4% in March, slightly above expectations. The increase was concentrated in goods prices which surged 2.3%, led by a gain of 5.7% in energy prices, while food prices rose 2.4%. Excluding food and energy, PPI rose a sharp 1.0%. On a y/y basis, PPI soared 11.2%, while core PPI advanced 9.2%, both hitting fresh record highs.
  • Sales at US retailers rose a modest 0.5% in March, slightly below the gain of 0.6% expected by economists. Last month’s gain mainly reflected higher gasoline prices, which rose 8.9% in the wake of the Russia/Ukraine war. Excluding gasoline, sales actually declined 0.3%, indicating that higher gasoline prices are causing consumers to spend less on other products. On a y/y basis, retail sales were 6.9% higher.
  • The University of Michigan’s consumer sentiment index’s preliminary reading for April rebounded 6.3 points to 65.7, a three-month high and well above expectations. The increase was led by a surge in the expectations index, as consumers expect continued strength in the labor market, further wage gains, a drop in gasoline prices and a leveling off of inflation.
  • Initial claims for unemployment insurance increased by 18,000 last week to 185,000, slightly above expectations, but still near the lowest level in 54 years. Additionally, continuing claims fell to the lowest level since March 1970, dropping by 48,000 to 1.48 million, as labor market conditions continue to tighten.

The Week Ahead:

  • Economic releases will include preliminary readings on services and manufacturing activity for the month of April, current housing data and March’s leading economic indicators.

Have a great weekend.

The data and commentary provided herein is for informational purposes only. No warranty is made with respect to any information provided. It is offered with the understanding that Hilltop Holdings Inc., PlainsCapital Corporation, Hilltop Securities and PlainsCapital Bank (collectively “PCB”) are not, hereby, rendering financial and/or investment advice, and use of the same does not create any relationship with PCB. This is neither an offer to sell nor a solicitation of an offer to buy any securities that may be described or referred to herein. PCB does not provide tax or legal advice. Please consult your own tax or legal advisor regarding your specific situation. Whether any of the information contained herein applies to a specific situation depends on the facts of that particular situation. Investment and estate planning and management decisions may have significant financial consequences and should be made only after consulting with professionals qualified to offer legal, accounting and taxation advice. Neither this document nor any portion of its content’s supplements, amends or modifies any account agreement with PCB. Unless otherwise noted:

*All economic release data referenced from public sources believed to be accurate       *The source of data for all charts/graphs included in this presentation is Bloomberg LP.       *Figures quoted represent monthly changes (m/m) and are seasonally adjusted

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