The Strength of the Market is: Strong

Last week, oil prices extended their gains and stocks extended their losses as investors awaited further developments in the Iran war. For the week, the S&P 500 posted a 1.6% loss, notching a three-week losing streak, the Dow Jones slid about 2% and the Nasdaq fell 1.3%. Iran’s new Supreme Leader Mojtaba Khamenei said that the Strait of Hormuz, a critical route for oil, should remain shut as a tool to pressure the enemy. Traffic in the Strait has virtually been halted since strikes were launched on Iran at the end of February. Increased oil prices are creating fears of a stagflationary environment - higher inflation and slower economic growth.

Economic reports from last week came back mixed:

•Small Business Optimism - lower than expectation

•Existing Home Sales - higher than expectation

•New Residential Construction - higher than expectation

•Inflation (Consumer) - in-line with expectation

•Gross Domestic Product - lower than expectation

•Personal Income - lower than expectation

•Consumer Sentiment - lower than expectation

•Job Openings - lower than expectation

•Jobless Claims - lower than expectation

This week, investors will look for guidance from economic reports like Retail Sales, Manufacturing, Housing, Inflation and Jobless Claims.