What I’m Watching This Week – 27 Jan 2014
The Markets
What I’m Watching This Week – 27 Jan 2014
The Markets
Domestic indices were mixed last week. The NASDAQ and Russell 2000 ended with slight gains, the Dow was basically flat, and the S&P 500 wound up with a slight loss after briefly returning to the level at which it started the year. The benchmark 10-year Treasury yield also saw a little dip.
With little fresh economic data available, investors may concentrate on the ongoing stream of earnings reports. The World Economic Forum at Davos also could produce some headlines.
Have an amazing week!
The Markets
Believers in the so-called January indicator–the concept that the first five trading days suggest the stock market’s overall direction for the rest of the year–were likely discouraged last week. The S&P gave up roughly half a percentage point during 2014’s first five trading days. The other three domestic indices also slipped during those five days, with losses ranging from the Nasdaq’s quarter of a percentage point to the Dow’s nearly seven-tenths of a percent. A rebound at week’s end gave three of the four domestic indices a gain for the week. However, the small-cap Russell 2000 was the only one to see a slight gain for both the week and the year so far. Meanwhile, the yield on the benchmark 10-year Treasury fell as the new year saw a new interest in bonds.
Last Week’s Headlines
Only 74,000 new jobs were added to U.S. payrolls in December; that’s the lowest number since January 2011, according to the Bureau of Labor Statistics. However, the unemployment rate fell from 7% to 6.7%, largely because of people dropping out of the workforce.
Minutes of the meeting at which the Federal Reserve’s monetary policy committee decided to begin scaling back its bond purchases emphasized once again that tapering will be done gradually and will depend on economic data. Members also forecast stronger economic growth in coming years and a gradually declining unemployment rate.
The Senate made it official that Janet Yellen will oversee the Fed’s tapering efforts. Members confirmed her appointment as the first woman to chair the Federal Reserve Board. She will take over when Ben Bernanke steps down January 31.
Record exports helped cut the U.S. trade deficit to $34.3 billion in November. According to the Bureau of Economic Analysis, that was the lowest level since September 2009.
Orders placed with U.S. factories in November surged 1.8% for the month, putting them at their highest level since the Commerce Department began tracking the figures in 1992. Inventories, which have risen 11 of the last 12 months, were partly responsible, but new orders for durable goods, particularly transportation equipment, also have risen 3 of the last 4 months and were up 3.4% in November.
Growth in U.S. service industries slowed slightly in December as the Institute for Supply Management’s gauge fell almost 1% to 53% during the month. The ISM survey also showed new orders falling to 49.4% in December, which represents actual contraction.
Eye on the Week Ahead
The Q4 2013 earnings season will get into high gear as several major financial and tech companies release reports. Data on retail sales for the holiday season will shed light on the state of consumers’ wallets.
Have a wonderfully profitable week!
What I’m Watching This Week
Here we are, 2014, and hopefully your portfolio had a profitable 2013. If not, we may need to have a chat. =)
The Dow was up 25%, the S&P 500 up 29% and the NASDAQ up 37% to end 2013. Your individual performance more than likely probably doesn’t reflect the substantial gains as the overall indices but hopefully you were able to capture a significant percentage to close out the year, hopefully.
Equities rang in the new year by taking a bit of a breather. As investors decided to take some of the profits that the Santa Claus rally had left in their stockings, the Dow lost 135 points on 2014’s first trading day, though it regained much of that the following day. The other three domestic indices fared slightly worse, though not as badly as the Global Dow. Meanwhile, gold showed signs of new life after its disastrous 2013, jumping nearly 3% in the first two days of the year.
Last Week’s Headlines
Home prices rose 0.2% in October, putting them 13.6% higher than 12 months earlier. The year-over-year gain in the S&P/Case-Shiller 20-City Composite Index was the strongest since February 2006, and October’s monthly increase represents the 17th straight month of gains. However, S&P warned that the monthly increases were showing signs of slowing.
Construction spending was up 1% in November, according to the Commerce Department, and was almost 6% higher than the previous November. Strength in both residential and non-residential private construction fueled the growth as spending on public works projects fell 1.8% during the month.
Eye on the Week Ahead
Last week’s light trading volumes should be back to normal this week, and those who believe that the first five trading days of January indicate something about equities’ subsequent direction during the coming year will have a better basis for making that assessment. Friday’s jobs numbers will be of interest, as always, as will the minutes of the meeting at which the Fed’s monetary policy committee decided to start tapering.
Have an amazing 2014, stay focused, aware and able to participate in achieving your individual goals for the year!