Marketbites: OPEC+ Slashes Oil Output
Portfolio Manager Commentary:
The Dow Jones Industrial Average added more than 300 points on Monday, as Wall Street shows resilience despite an oil output cut from OPEC+ that threatens to stoke inflation and recession fears. Investors spent much of the trading session digesting the news from OPEC+ which is slashing 1.16 million barrels per day. West Texas Intermediate futures gained 6.28% to settle at $80.42, and Brent futures rose 6.31% to settle at $84.93. The prospect of higher oil prices could add further unease to Wall Street as the output cut plays out, according to Morningstar energy strategist Stephen Ellis.
“The actual cut itself was less of a surprise, given the large increase in global inventories and recession concerns, likely increased by the recent banking struggles,” Ellis says. “Higher oil prices are likely to provide a modest boost to inflation, providing more of a dampening effect on the economy.”
The first week of the new quarter is a shortened one for Wall Street, as trading will be closed for Good Friday. However, there will be several key pieces of economic data for investors, including job openings data coming out today, ADP private payrolls report on Wednesday, and the closely watched monthly jobs report on Friday.
Chart of the Day:
The best job markets were concentrated in the south last year. Nashville, Tenn., topped the list of 2022’s hottest job markets, followed by Austin, Texas, and Jacksonville, Fla. Other cities known for tourism—notably Orlando, Las Vegas, and New Orleans—climbed the ranks last year. Those Sunbelt cities benefited from a continued recovery in travel and a hiring boom at restaurants, hotels and music venues, consistent with the resurgent services sector driving the U.S. economy in recent months. New York was among the few large metros that lost people from its labor force last year. Los Angeles had above-average unemployment and below-average wage growth. Washington, D.C., had strong labor-force participation among residents, but struggled more than most cities to attract new workers and jobs.
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