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Weekly Market Update for April 1, 2022

The first quarter of 2022 came to an end Thursday with the S&P 500 down approximately 1.5%, pushing markets lower in what was a trying period for all asset classes.  On Friday markets closed higher after the release of the March jobs report.

The March jobs report showed employers added 431,000 jobs last month, just shy of expectations but a robust number nonetheless. February’s number was revised to 750,000 from 678,000. 600,000 new jobs have been created, on overage, each month over the past six months, helping the economy regain over 90% of the jobs lost during the heights of the pandemic in 2020. The unemployment rate ticked down to 3.6% from 3.8% while wages continued their upward trend, rising 0.4% in March, in line with expectations.

As impressive as wage growth has been, it has not been able to keep pace with inflation, as prices continue to rise at their fastest rate in 40 years. Given the inflationary environment, indications point to the Federal Reserve raising interest rates up to six more times this year, with each hike coinciding with the six remaining Fed meetings. A 25-basis-point (possibly 50) increase is anticipated in May, with rate hikes adding up to a total of approximately 2.25/2.5 percentage points by the end of the year (per current consensus).

First quarter company earnings reports will start to trickle out next week. Expect another batch of solid reports as companies continue to unwind supply-chain bottlenecks, though geopolitical tensions (i.e. the war in Ukraine) and increased commodity and energy costs could put a strain on bottom lines.

The aforementioned war in Ukraine slogs on with talks between the two sides set to resume today. The Russian advance continues to be hindered by resilient Ukrainian forces. Let’s hope for a resolution to this sad and unnecessary conflict. The world (and markets) would breathe a sigh of relief.

The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes to assist in explaining factors that may have had an impact in the past or may have an impact in the future on client portfolios or composites. All expressions of opinion reflect the judgment of the firm on this date and are subject to change. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Investors should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All investors are strongly urged to consult with their tax advisors regarding any potential investment.

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Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464