Market Insights 3/19/2019

U.S. equities reversed course in late-day trading to finish mixed as caution appeared to set in ahead of tomorrow’s monetary policy decision from the Federal Reserve.

Treasury yields were higher and gold gained ground, while the U.S. dollar was lower and crude oil prices were mixed.

The Markets…

The Dow Jones Industrial Average declined 27 points (0.1%) to 25,887

The S&P 500 Index was nearly unchanged at 2,833

The Nasdaq Composite increased 9 points (0.1%) to 7,724

In heavy volume, 968 million shares were traded on the NYSE and 2.4 billion shares changed hands on the Nasdaq

WTI crude oil inched $0.09 lower to $59.29 per barrel and wholesale gasoline added $0.02 to $1.88 per gallon

The Bloomberg gold spot price advanced $2.99 to $1,306.70 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—lost 0.2% to 96.37

Factory orders flat, Fed meeting begins

Factory orders grew 0.1% month-over-month in January, versus expectations of a 0.3% rise, and compared to December’s unrevised 0.1% increase. Stripping out the volatile transportation component, orders moved 0.2% lower, above December’s upwardly-revised loss.

Treasuries were lower, as the yields on the 2-year and 10-year notes, along with the 30-year bond, were 1 basis point (bp) higher at 2.47%, 2.61% and 3.02%, respectively.

The Federal Open Market Committee’s (FOMC) monetary policy meeting began today, which will conclude tomorrow with its rate decision. It is widely expected the Committee will leave the target range for the fed funds rate unchanged, while the press conference by Fed Chairman Jerome Powell is likely to be of significant interest to investors.

In addition to the conclusion of the FOMC monetary policy meeting, the only other item on tomorrow’s economic calendar is MBA Mortgage Applications.

Europe higher with caution set aside, Asia mixed

European equities finished higher, as this week’s positive returns in the U.S. and tomorrow’s Fed rate decision seemed to stoke confidence. Meanwhile, economic news in the region was upbeat, as strong unemployment data in the U.K. complemented a rise in a read on economic sentiment out of Germany. The unemployment measures in the U.K. hit a 44-year low, but the reaction was muted as an unchanged monetary policy decision by the Bank of England in May is widely expected, while the Zew Economic Sentiment Survey in Germany rose 9.8 points to a level of -3.6, with the current conditions reading moving lower.

The euro traded to the upside versus the U.S. dollar, while bond yields in the region were higher. The British pound finished higher versus the greenback in choppy action, as Brexit uncertainty over a possible European Union extension and a third vote of the Prime Minister’s plan persisted.

Stocks in Asia finished mixed on the heels of yesterday’s modest gains in the U.S., as caution ahead of tomorrow’s monetary policy decision out of the U.S. coupled with continued U.S./China trade uncertainty to drag on conviction.

Japanese equities declined slightly, with some choppiness in the yen, and Australian securities were flat following the release of the minutes from the Reserve Bank of Australia’s latest monetary policy meeting. The report cultivated somewhat mixed reviews, as it reinforced labor and trade conflict concerns that were behind the decision to leave the board’s inflation target unchanged, noting that trade tensions “remained a continued source of uncertainty for the global outlook.”

Stocks in mainland China declined, but those traded in Hong Kong ticked higher, while markets in India and South Korea gained ground.

Market Insights 3/18/2019

U.S. equities finished with modest gains after a mixed session. Treasury yields were mostly higher and the U.S. dollar dipped, while gold and crude oil prices were slightly higher.

Optimism of a U.S./China trade deal nearing gave stocks an early boost, but caution settled in ahead of the start of this week’s Fed monetary policy meeting, while late-day developments surrounding Brexit added some additional uncertainty to the mix.

The Markets…

The Dow Jones Industrial Average rose 65 points (0.3%) to 25,914

The S&P 500 Index gained 11 points (0.4%) to 2,833

The Nasdaq Composite increased 26 points (0.3%) to 7,714

In moderately-heavy volume, 950 million shares were traded on the NYSE and 2.2 billion shares changed hands on the Nasdaq

WTI crude oil was $0.57 higher at $59.09 per barrel and wholesale gasoline added $0.02 to $1.88 per gallon

The Bloomberg gold spot price advanced $0.90 to $1,303.03 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—lost 0.1% to 96.52

Housing data below forecasts to begin the week

The National Association of Home Builders (NAHB) Housing Market Index showed home-builder sentiment in March was unchanged at 62 from February’s unrevised level, compared to an expected rise to 63. A level of 50 separates good and poor conditions. The NAHB noted that affordability still remains a key concern for builders, mentioning the challenges of a skilled worker shortage, a lack of quality lots and stiff zoning restrictions in many major metro markets.

Treasuries finished mostly lower, as yield on the 2-year note was up 2 basis points to 2.45%, while the yield on the 10-year note ticked 1 bp higher to 2.60%, and the 30-year bond rate was flat at 3.01%.

The volatility in the markets may continue this week, with the start of the Federal Open Market Committee’s (FOMC) two-day monetary policy meeting tomorrow. The Committee is expected to leave the target range for the fed funds rate unchanged, and there will be a press conference by Fed Chairman Jerome Powell.

Europe turns mixed following U.K. Parliament ruling, Asian markets positive

European equities pared early gains to finish mixed, with positive sentiment surrounding easing U.S./China trade concerns and a continued dovish Fed ahead of its forthcoming monetary policy meeting being overshadowed by increased Brexit uncertainty. Late in the day, the speaker of the House of Commons in the U.K. ruled that Prime Minister Theresa May would not be able to ask for another vote on her Brexit deal, of which has been handily rejected on two previous votes, unless there are substantial changes. The U.K. is scheduled to leave the European Union (EU) on March 29, but no deal with EU officials in Brussels has come to fruition. With the U.K. Parliament rejecting a “no-deal” Brexit, the next expected step is an extension request of the deadline date.

The British pound fell to session lows following the ruling, while the euro gained ground versus the U.S. dollar and bond yields in the region turned lower late in the day. On the data front, the Eurozone trade balance jumped higher, and housing prices in the U.K. fell for Q4.

Stocks in Asia finished higher on the heels of the gains in the U.S. last week, as investors awaited this week’s monetary policy meeting in the U.S. and possible U.S./China trade developments. Market sentiment seemed to be encouraged by last Friday’s Chinese state media report that implied progress has been on made on finalizing a trade deal between the world’s two largest economies.

Mainland Chinese equities and those traded in Hong Kong rose, as markets in the region continue to put together strong 2019 returns. Also, Russia’s energy minister stated that the country plans to be fully compliant with OPEC-led supply cuts over the next few weeks, though crude oil prices showed little upward enthusiasm on the news. Stocks in Japan increased amid weakness in the yen and a slump in exports for February, following last week’s unchanged monetary stance from the Bank of Japan, while Australian securities ticked modestly higher.

Random Thoughts

The Golden Cross Shines with the S&P 500, but not the DJIA or Small Caps

The Dow Jones Industrial Average’s 50-day moving average is currently fewer than 100 points below its 200-day average.

Many investors get excited by the Golden Cross, which occurs when the 50-day breaks above the 200-day. (The Death Cross is the converse, when the 50-day crosses below the 200-day.)

But how worthwhile has it been to be long these benchmarks when their 50-day average was above the 200-day, but on the sidelines when the reverse was true? History says that at best it provided little benefit for two prominent large- and small-cap benchmarks.

Indeed, since 1990, while the DJIA and Russell 2000 each posted compound annual growth rates of 8.0%, the “Cross” strategy delivered reduced returns of 5.7% and 5.0%, respectively. In addition, the strategies recorded discouraging frequencies of equaling or outpacing the broader benchmarks at 37% and 33%. However, the strategy did offer some encouraging results using the S&P 500.

Whether looking back to 1950, 1970, 1990 or 2000, the Golden Cross Strategy using the S&P 500 delivered worthwhile returns for those investors desiring exposure to the broader market, but requiring a risk-reduction approach that produced lower annual volatility and minimal annual losses.

U.S. Market Weekly Summary – Week Ending 03/15/2019

S&P 500 Posts 2.9% Weekly Gain in Broad Climb Led by Technology, Health Care, Energy; Index Up 13% YTD

The Standard & Poor’s 500 index posted a 2.9% increase this week as the technology, health-care and energy sectors led a broad advance that was boosted by data showing inflationary pressures remain tame while declining global oil supplies lifted crude-oil futures.

The market benchmark ended the week at 2,822.48, up from last Friday’s closing level of 2,743.07. The index is now up 13% for the year to date.

The gain was broad, with every sector of the S&P 500 in the black for the week, led by the technology sector, up 4.9%. The next-largest gains for the week were posted by energy and health care, up 3.2% each.

The broad climb came as this week’s round of economic data included the consumer-price index, which rose a seasonally adjusted 0.2% last month. The reading boosted investors’ confidence that the Federal Open Market Committee will hold off rate increases in the near future.

The technology sector’s jump was led by Nvidia and Apple. Shares of Nvidia added 13% this week as the chip maker confirmed a deal to acquire Israeli-based computer-networking-products maker Mellanox Technologies (MLNX) for $125 per share in cash, representing a total enterprise value of approximately $6.9 billion. Nvidia expects the deal to immediately boost its adjusted gross margin, adjusted earnings per share and free cash flow upon completion of the transaction, which is expected by the close of 2019.

Apple’s shares rose 7.6% this week amid excitement over an expected announcement by the consumer-technology company of a video-streaming service. The company is expected to unveil the service at an event scheduled for March 25 at its Cupertino, California headquarters. Apple’s shares were also boosted this week by a report by Morgan Stanley saying the consumer-technology company appears to have gained more share in the Chinese smartphone market in the first two months of the year after having lost some ground in December.

The health-care sector’s advancers, meanwhile, included Align Technology (ALGN), which unveiled a partnership with Digital Smile Design under which the latter will highlight Align’s Invisalign system and iTero Element scanners as “the digital solutions of choice for tooth movement and scanning.” Align’s shares climbed 9.3% this week.

The energy sector’s rise came as crude-oil futures rose to four-month highs, boosted by data showing crude-oil stockpiles unexpectedly fell by 3.9 million barrels last week to 449.1 million barrels. The drop in inventories comes amid sanctions by the US on Venezuela and Iran.

Market Insights 3/14/2019

U.S. equities finished mixed and very near the flat line in very choppy trading, as investors mulled a host of news and events, including another dose of disappointing Chinese economic data.

Treasury yields and crude oil prices were mixed, the U.S. dollar moved higher, and gold tumbled.

The Markets….

The Dow Jones Industrial Average inched 7 points higher to 25,710

The S&P 500 Index declined 2 points (0.1%) to 2,809

The Nasdaq Composite lost 13 points (0.2%) to 7,631

In moderately-heavy volume, 912 million shares were traded on the NYSE and 2.2 billion shares changed hands on the Nasdaq

WTI crude oil rose $0.35 to $58.61 per barrel and wholesale gasoline lost $0.01 to $1.85 per gallon

The Bloomberg gold spot price fell $12.95 to $1,296.17 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.3% higher at 96.81

Import prices rise, along with jobless claims, new home sales miss

The Import Price Index rose 0.6% m/m for February, above the Bloomberg projection of a 0.3% gain, following January’s upwardly-revised 0.1% gain from an initially-reported 0.5% decline. Compared to last year, prices were down by 1.3%, versus forecasts of a 1.5% decrease and compared to January’s upwardly-revised 1.6% drop.

Weekly initial jobless claims rose by 6,000 to 229,000, versus expectations calling for 225,000, with the prior week’s figure being unrevised at 223,000. The four-week moving average declined by 2,500 to 223,750, while continuing claims increased by 18,000 to 1,776,000, north of estimates of 1,763,000.

New home sales fell 6.9% month-over-month (m/m) in January to an annual rate of 607,000 units, versus forecasts calling for 622,000 units and the upwardly-revised 652,000 unit pace in December. The median home price was down 3.8% y/y to $317,200.

Treasuries were mixed, as the yield on the 2-year ticked 1 basis point (bp)lower to 2.45%, while the yield on the 10-year note rose 1 bp to 2.64%, and the 30-year bond rate was up 3 bps to 3.04%. The U.S. dollar trimmed a recent pullback, with the British pound seeing pressure after last night’s Brexit vote that took a “no deal” divorce from the European Union (EU) off the table.

In late day action, the nation’s Parliament voted in favor of a delay in Britain leaving the EU. Also, the markets continue to grapple with mixed economic data amid the backdrop of the Fed being patient with monetary policy.

The week’s economic calendar will come to a close tomorrow with the Federal Reserve’s industrial production and capacity utilization report, with production expected to increase 0.4% m/m during February and utilization to tick higher to 78.4%, and the Job Openings and Labor Turnover Survey (JOLTS) will also be released, anticipated to show 7.3 million jobs were available to be filled in January, matching the prior month’s reading, while the preliminary March University of Michigan Consumer Sentiment Index will round out the docket, forecasted to post a reading of 95.3, above the 93.8 registered in February.

Europe higher as Brexit continues to garner attention, Asia mixed

European equities finished higher, with the British pound paring yesterday’s gains following yesterday’s vote to not leave the European Union (EU) without a deal in place, setting the stage for another vote that occurred after the markets were closed.

The nation’s Parliament voted in favor of a delay in Britain leaving the EU, paving the way for Prime Minister Theresa May to head to Europe to request such a delay past the March 29 deadline, a deferment May had previously indicated would be short-term and no later than June. The euro was also lower and bond yields in the region were mixed.

Stocks in Asia finished mixed following the continued gains in the U.S. yesterday, though mainland Chinese markets saw some pressure following another dose of disappointing economic data. The markets also paid attention to the latest U.K. Brexit developments as the region voted yesterday to not leave the EU without a deal in place.

China reported a 17-year low in industrial production growth for the first two months of the year, while its retail sales rose in line with expectations and its fixed asset investment accelerated.

Stocks in mainland China fell, but those traded in Hong Kong saw modest gains, with the data likely being countered by the nation’s recent stimulus measures and the lingering optimism of a potential trade deal with the U.S.

Market Insights 3/13/2019

U.S. equities finished in the green, continuing to grind higher. Investors seemed to shrug off the uncertainty surrounding Brexit, with some key votes continuing later today and tomorrow after Prime Minister May’s exit plan decree was handily rejected yesterday.

Treasury yields and gold were higher, and the U.S. dollar was lower, while crude oil prices gained ground amid an unexpected drop in crude oil inventories.

The Markets..

The Dow Jones Industrial Average (DJIA) rose 148 points (0.6%) to 25,703

The S&P 500 Index increased 20 points (0.7%) to 2,811

The Nasdaq Composite gained 52 points (0.7%) to 7,643

In heavy volume, 960 million shares were traded on the NYSE and 2.3 billion shares changed hands on the Nasdaq

WTI crude oil rose $1.39 to $58.26 per barrel and wholesale gasoline was up $0.04 to $1.86 per gallon

The Bloomberg gold spot price gained $9.58 to $1,311.16 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.4% lower at 96.55

Durable goods orders mostly top forecasts, wholesale price inflation cooler than expected

January preliminary durable goods orders rose 0.4% month-over-month (m/m), compared to the Bloomberg estimate of a 0.4% decrease and December’s upwardly-revised 1.3% increase. Ex-transportation, orders dipped 0.1% m/m, versus forecasts of a 0.1% rise and compared to December’s favorably-revised 0.3% gain. Orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, grew 0.8%, compared to projections of a 0.2% gain, and the prior month’s figure was revised upward to a 0.9% decrease from the initially reported 1.0% drop.

The Producer Price Index (PPI) showed prices at the wholesale level in February ticked 0.1% higher m/m, compared to forecasts of a 0.2% gain, and following January’s unrevised 0.1% dip. The core rate, which excludes food and energy, was also up 0.1% m/m, versus expectations of a 0.2% gain, and after January’s unadjusted 0.3% increase. Y/Y, the headline rate was 1.9% higher, matching projections and compared to January’s unrevised 2.0% rise. The core PPI rose 2.5% y/y last month, below estimates to match January’s unrevised 2.6% increase.

The MBA Mortgage Application Index moved 2.3% higher last week, following the prior week’s 2.5% decline. The increase came as a 0.2% dip in the Refinance Index was more than offset by a 4.3% jump for the Purchase Index. The average 30-year mortgage rate decreased 3 basis points (bps) to 4.64%.

Treasuries were mostly lower, as the yield on the 2-year note was flat at 2.45%, the yield on the 10-year note lost 1 bp to 2.61%, and the 30-year bond rate moved 2 bps lower to 3.01%. The U.S. dollar dipped to extend a recent pullback, with the British pound gaining solid ground amid a series of Brexit votes and as the markets grapple with mixed economic data amid the backdrop of the Fed being patient with monetary policy.

February’s inflation landscape will culminate tomorrow with the release of the Import Price Index, forecasted to have risen 0.3% m/m following January’s 0.5% decline. Weekly initial jobless claims are also on tap, expected to increase 2,000 to 225,000, and new home sales will round out the economic calendar, with economists projecting a 0.9% m/m fall during January to an annual rate of 620,000 units.

Europe higher following data, despite Brexit uncertainty, Asia lower

European equities finished higher, with the energy sector rising as crude oil prices are extending a recent advance, while the economic front showed Eurozone industrial production rose more than expected in January. The euro gained ground versus the U.S. dollar and bond yields in the region were mostly higher. Stocks were able to show some resiliency in the face of a solid gain in the British pound amid ramped-up U.K.

Brexit uncertainty on the heels of the defeat of Prime Minister Theresa May’s revised divorce plan yesterday in parliament. The loss sets up a string of votes today and tomorrow that could determine if the direction of the nation’s exit from the European Union (EU). One such vote that occurred after the European markets were closed rejected a “no deal” Brexit, paving the way for the increased possibility of a delay in the March 29 deadline.

Stocks in Asia finished mostly lower with the markets digesting some disappointing economic data in the region and U.K. Brexit uncertainty increased following the defeat of Prime Minister May’s revised divorce plan from the EU, which opened the door to more votes on how the plan proceeds from here.

Japanese equities declined, with the yen choppy and the nation reporting a much larger-than-expected drop in core machine orders—a gauge of capital spending—for January. Stocks in Australia dipped on the heels of a drop in the country’s consumer sentiment for this month. Meanwhile, markets in mainland China, Hong Kong and South Korea were also lower.

Random Thoughts

A highly regarded technical analyst once said that when it comes to equity benchmarks, large round numbers are like rusty doors that require several attempts before finally swinging open.

Such is the case with the 2800 level on the S&P 500, which repelled prior eclipsing attempts, but may have finally succumbed to the most recent thrust.

We think this market strength has further to run as Q1 weakness in both GDP and EPS growth should be reversed in future quarters, with additional strength possibly coming from a final resolution to the U.S./China trade dispute.

We currently project GDP growth of only 1.6% in Q1 followed by a 3.2% rebound in Q2. Additionally, while the first step in an EPS recession is expected to be recorded in Q1 with a near 2% decline in Y/Y operating results, we see the S&P 500 ultimately sidestepping a earnings recession with a 2% increase in Q2 and further advances in subsequent quarters.

Market Insights 3/12/2019

U.S. stocks finished mostly to the upside, with tech issues continuing to rally this week, after shares rose yesterday on accompanying retail sales data, while today’s inflation reading was muted.

Treasury yields and the U.S. dollar turned lower and crude oil prices and gold were higher.

The Markets…

The Dow Jones Industrial Average fell 96 points (0.4%) to 25,555

The S&P 500 Index increased 8 points (0.3%) to 2,792

The Nasdaq Composite rose 33 points (0.4%) to 7,591

In moderate volume, 825 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq

WTI crude oil rose $0.12 to $56.91 per barrel and wholesale gasoline was down $0.01 to $1.82 per gallon

The Bloomberg gold spot price gained $7.97 to $1,301.29 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.3% lower at 96.88

Consumer price inflation mostly cooler than expected, small business optimism ticks higher

The Consumer Price Index (CPI) rose 0.2% month-over-month (m/m) in February, matching the Bloomberg estimate, and versus January’s unrevised unchanged figure. The core rate, which strips out food and energy, was 0.1% higher m/m, versus expectations to match January’s unrevised 0.2% gain. Y/Y, prices were 1.5% higher for the headline rate, below of forecasts to match January’s unrevised 1.6% increase. The core rate was up 2.1% y/y, versus projections to be in line with January’s unadjusted 2.2% increase.

The National Federation of Independent Business (NFIB) Small Business Optimism Index for February rose to 101.7 from January’s unrevised 101.2 level, and versus expectations of an increase to 102.5. Business owners expressed improved views about future business conditions and the current period as a good time to expand, along with plans to make capital outlays. Earnings trends weakened, due to the impact of the government shutdown, while worker compensation and selling prices were lower m/m, but job openings rebounded remaining at historically high levels.

Treasuries moved higher, as the yield on the 2-year note declined 3 basis point (bp) to 2.45%, while the yields on the 10-year note and 30-year bond fell 4 bps to 2.60% and 2.99%, respectively.

Tomorrow, we will get another look at February inflation data, with the release of the Producer Price Index (PPI), forecasted to tick 0.2% higher m/m, after January’s 0.1% dip, while core PPI is anticipated to rise 0.2% after the prior month’s 0.3% rise. Y/Y, headline PPI is projected to slow to a 1.9% increase from January’s 2.0% pace and the core rate is estimated to remain flat m/m at a 2.6% gain.

Europe mixed on data, Asia mostly higher following U.S. rebound

European equities finished mixed, with the markets choppy ahead of the U.K. parliament voting down Prime Minister Theresa May’s revised Brexit proposal for the second time in two months. The British pound was lower versus the U.S. dollar, in volatile trading as the revised agreement failed to pass, leading to possible votes over the next two weeks to avoid a no-deal Brexit and to delay the March 29 divorce deadline. Preceding the subdued U.S. inflation report, U.K. industrial and manufacturing production figures came in better than expected for January, while France’s Q4 employment data topped estimates.

Stocks in Asia finished mostly to the upside on the heels of the rebound in the U.S. from the prior week’s drop that came as retail sales came in stronger than expected following a December drop. The markets also awaited today’s U.K. Brexit vote after Prime Minister May struck a revised deal with the European Union. Japanese equities rose to lead the way, with the yen weakening versus the U.S. dollar, while mainland Chinese stocks gained ground and Hong Kong issues advanced.

South Korean equities increased and Indian stocks moved higher. As the Indian markets were closing, the nation reported hotter-than-expected consumer price inflation data for February and a smaller-than-forecasted rise in industrial production for January. Australia’s issues dipped, with a rebound in the energy sector being more than offset by weakness in financials.

The Longest Bull, with the Greatest EPS Surge, Has Yet to be Corralled

The S&P 500’s bull market that started on March 9, 2009 is celebrating its 10th birthday. No other bull market has lasted longer. However, even though investors have reason to celebrate, they may be premature.

The S&P 500 will have to close above the September 20, 2018 high before it can officially claim to have lasted a full 10 years. At its peak, this bull gained 333%.

In the past 10 years, while global stocks advanced a respectable 219%, U.S. small-caps led the way, surging nearly 500%. In addition, all sectors in the S&P Composite 1500 that have been around all 10 years rose in price, led by consumer discretionary (+626%), information technology (+560%) and financials (+450%). Laggards included utilities (+151%), communications services (+79%), and energy (+78%).

Finally, 97% of the S&P 1500’s 121 sub-industries in existence since 3/9/09 gained in price during this bull market, led by quadruple-digit advances for application software, internet & direct marketing retail and managed health care. Declines were limited to only four groups: Coal, education services, gold and oil & gas drilling.

Today, the question on most investors’ minds is “Did this bull market end last September, or did the near-bear swoon through December 24, 2018 reset the dials?”

We acknowledge that this bull has begun to buck more aggressively, but we don’t think it is about to be tamed any time soon. Bull markets don’t die of old age, they die of fright – and are most afraid of recession. Even though the current wall of worry remains elevated, we see no recession on the horizon to pose an impediment to global economic expansion nor stall the projected improvement in corporate profits.

U.S. Market Weekly Summary – Week Ending 03/08/2019

S&P 500 Posts 2.2% Weekly Drop as Health Care, Energy, Industrials Lead Broad Decline

The Standard & Poor’s 500 index fell 2.2% this week in a broad decline led by the health-care, energy and industrial sectors as weaker-than-expected job growth for February raised investors’ worries about the economy while the ongoing trade dispute between the US and China also weighed on sentiment.

The S&P 500 ended the week at 2,743.07, down from last week’s closing level of 2,803.69. This marks the index’s largest weekly drop since December.

The decline came as data released Friday by the Labor Department showed US non-farm payrolls rose by just 20,000 in February on a seasonally adjusted basis, handily missing the 175,000 increase economists had expected.

Meanwhile, the trade dispute between the US and China remains unresolved and a report by the Wall Street Journal cited the US ambassador to China as saying the US and China have yet to set a date for a summit to resolve it. The ambassador said negotiators need to further narrow the gap in their positions before arrangements are made for a summit, according to the report.

The health-care and energy sectors had the largest declines of the week, down 3.9% each, followed by a 2.9% drop in industrial stocks. Other sectors down by more than 2% included financials, consumer discretionary and technology.

Just two sectors ended the week in the black: utilities, which edged up 0.7%, and real estate, which eked out a gain of 0.5%.