Marketbites: Job Openings Report Shows Slowing Economy
Portfolio Manager Commentary:
The Dow Jones Industrial Average fell nearly 200 points on Tuesday as traders assessed a spike in oil prices and what that could mean for the global economy. The losses also followed the latest job openings report. The report disclosed that the number of available positions dropped below 10 million in February for the first time in nearly two years. This is a sign that the once-hot labor market supporting the economy is starting to slow.
However, “there’s still plenty of job openings relative to [the] unemployed,” said Ed Yardeni, president of Yardeni Research. “The market is very sensitive to any minor change in the direction that they don’t want to see.” To be sure, markets have been resilient as of late, with the major averages rising even when faced by persistent inflation, a banking crisis, and higher rates.
This week, the energy market became another potential source of uncertainty, after OPEC+ announced it was slashing output by 1.16 million barrels of oil per day. On Monday, West Texas Intermediate futures had their biggest daily gain in nearly a year on the news. “Given the transition the world is undergoing as it embraces ‘clean and green energy,’ OPEC+ understands all too well that its still highly valued ‘liquid gold’ will at some point begin to lose its shine,” said Quincy Krosby, chief global strategist for LPL Financial.
Chart of the Day:
Rented homes were supposed to be the safest nook in the U.S. real-estate market. It isn’t turning out that way. Rising interest rates are taking the air out of bubbly property valuations. Apartment prices are currently down 21% over the past year, according to the Green Street Commercial Property Price Index. This makes them the second-worst performing category of real estate after offices, which have lost 25%. Institutional investors tend to own fewer individual family homes, where values have been more resilient so far.
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