The Markets

It was a grim week, not only in France but in financial markets worldwide. Despite a mid-week bounce, equities prices continued to follow oil on a downward path. The small caps once again bore the brunt of the selling, while the price of oil fell below $50 a barrel. Not surprisingly, U.S. Treasuries benefitted from the world’s black mood; as prices rose, the benchmark 10-year yield dropped below 2% for the first time since May 2013.

Market/Index	2014 Close	Prior Week	As of 1/9	Weekly Change	YTD Change
DJIA	17823.07	17832.99	17737.37	-.54%	-.48%
Nasdaq	4736.05	4726.81	4704.07	-.48%	-.68%
S&P 500	2058.90	2058.20	2044.81	-.65%	-.68%
Russell 2000	1204.70	1198.80	1185.68	-1.09%	-1.58%
Global Dow	2501.66	2491.50	2459.59	-1.28%	-1.68%
Fed. Funds	.25%	.25%	.25%	0%	0%
10-year Treasuries	2.17%	2.12%	1.98%	-14 bps	-19 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Headlines

• Minutes of December’s Federal Open Market Committee meeting showed that the committee’s recent shift to language about “patience” was intended to underscore its desire to remain flexible in dealing with rate hikes, basing decisions on ongoing data rather than a timetable.
• The addition of 252,000 new jobs in December cut the unemployment rate by 0.2% to 5.6%. According to the Bureau of Labor Statistics, those additions exceeded 2014’s 246,000 monthly average gain. However, hourly wages fell 5 cents to $24.57, though they were 1.7% higher than in December 2013.
• The pace of growth in the U.S. manufacturing sector slowed in December, according to the Institute for Supply Management. The institute’s most recent survey showed a 3.1% drop from November’s 59.3% reading. However, any figure above 50% represents expansion, and December’s figure was roughly equal to the monthly average for all of 2014.

Eye on the Week Ahead

Monday’s after-hours Alcoa announcement marks the unofficial kickoff to the earnings reporting season for Q4, which could overshadow U.S. inflation and manufacturing data.