Must be a valid email address.
Password must be 8-64 characters.
Must be a valid phone number.
Recession incoming? Here’s how you can prepare.
Daily Capital
Home>Daily Capital>Investing & Markets>Market Digest – Week Ending 5/4

Market Digest – Week Ending 5/4

[dropcap]T[/dropcap]he S&P 500 fell 2.4 percent — the largest weekly decline of the year. A weaker-than-expected jobs report released Friday drove most of the selling. Payrolls climbed by 115,000, well below estimates. The unemployment rate dropped to 8.1 percent, but the decline was largely due to people leaving the labor force. Economic news out of Europe also caused concern, with Spain officially entering recession. Treasuries rose as investors sought safer assets and moved away from Euros. Oil fell below $100 per barrel for the first time since February.

Weekly Returns

S&P 500: 1,369 (-2.4%)

MSCI EAFE: (-2.9%)

U.S. 10-Year Treasury Yield: 1.88% (-0.05%)

Gold: $1,642 (-1.2%)

USD/EUR: $1.309 (-1.1%)

Major Events

  • Monday – Spain’s GDP contracted 0.3 percent in the first quarter.
  • Thursday – The Institute for Supply Management said the non-manufacturing index fell to a four-month low of 53.5 in April.
  • Thursday – Facebook announced it would target a May 18 IPO with a $25 to $35 share price range. The upper end would give the company a valuation just shy of $100 billion.
  • Friday – U.S. jobs growth in April was reported at 115,000, below expectations. The report created fear that the economic recovery is fading.

Our Take

Most of this week’s market decline came on the heels of the U.S. jobs report. It was bad, but not awful. Government jobs declined by 15,000, while the private sector number increased by 130,000. One slow month does not break the more positive longer-term trend.

News out of Europe continues to be bad. The continent appears headed into recession, but this will not be a surprise to anyone. Now that it is happening, however, there are political implications. Four elections this weekend could have a significant impact on how Europe handles its crisis. France will likely install a Socialist president for the first time since 1981, while in Germany Angela Merkel is in danger of losing mostly symbolic support. Greece may have trouble forming a government at all. The result right now is increased uncertainty. We would like to see European governments get a handle on spending, but it is possible the tide shifted too far toward austerity in the face of a recession. The right amount of sway in the other direction may prove just about right.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Craig Birk leads the Personal Capital Advisors Investment Committee and serves as Chief Investment Officer. His focus is translating improvements in technology into better financial lives. Craig has been widely quoted in the Wall Street Journal, Bloomberg, CNN Money, the Washington Post and elsewhere. Prior to Personal Capital Advisors, he was a leader within the portfolio management team at Fisher Investments, helping assets under management grow from $1.5 billion to over $40 billion. Craig graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.
Icon Close

To learn what personal information Personal Capital collects, please see our privacy policy for details.

Ask Us Anything

We want to hear from you.

What finance question is burning a hole in your pocket?

Thank you for sharing what’s on your mind!

Our team will be in touch shortly.