Tag: investment

The Markets

The markets responded favorably following the Federal Reserve’s announcement that interest rates would not be raised next month. Both the large-cap Dow and S&P 500 closed ahead of last week. But the biggest weekly gainers were the Nasdaq, which gained 1.3%, and the Russell 2000, which closed the week 1.55% better than last Friday’s close. The national average for gas prices was $2.835–up $0.055 from last week. Gold finished the week up $21 from last week, selling at $1,200.20.

Market/Index	2014 Close	Prior Week	As of 6/19	Weekly Change	YTD Change
DJIA	17823.07	17898.84	18015.95	0.65%	1.08%
Nasdaq	4736.05	5051.10	5117.00	1.30%	8.04%
S&P 500	2058.90	2094.11	2109.99	0.76%	2.48%
Russell 2000	1204.70	1265.02	1284.66	1.55%	6.64%
Global Dow	2501.66	2566.43	2565.76	-0.03%	2.56%
Fed. Funds	0.25%	0.25%	0.25%	0%	0%
10-year Treasuries	2.17%	2.39%	2.26%	-13 bps	9 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

• Economic activity has been “expanding moderately” according to the statement from the latest Federal Open Market Committee meeting. But short-term interest rates will remain as is, at least through the next monthly meeting. The FOMC noted that the “pace of job gains picked up while the unemployment rate remained steady,” there has been growth in household spending, and the “housing sector has shown some improvement; however, business fixed investment and net exports stayed soft.” Inflation continued to run below the committee’s longer-run objective (2%). Ultimately, the committee determined that the current federal funds rate is appropriate pending progress “toward maximum employment and price stability.” Before federal fund rates will be increased, the committee “would like to see more decisive evidence that moderate pace of economic activity can be sustained,” according to Federal Reserve Chairwoman Janet Yellen.
• Initial claims for unemployment insurance fell to 267,000 for the week ending June 13, which is a decrease of 12,000 from the previous week. The advanced seasonally adjusted insured unemployment rate was 1.7% for the week ending June 6, while the total number of insured unemployment claimants was 2.22 million, a decrease of 50,000 from the previous week. Evidencing signs of consistent job creation, new claims have remained under 300,000 over the past 15 weeks–the longest such stretch since 2000, according to the Wall Street Journal. Nevertheless, “at 5.5%, we have an unemployment rate that still exceeds the (Federal Reserve) committee’s best attempts to estimate what is a normal unemployment rate for this economy,” according to Chairwoman Yellen.
• The Federal Reserve reported on Monday that industrial production decreased 0.2% in May after falling 0.5% in April. Manufacturing output decreased 0.2% in May and was little changed, on net, from its level in January. Meager industrial production is likely due to weak exports and a relatively strong dollar, which could further strengthen if interest rates are raised later this year.
• Housing starts dropped off in May, but the number of residential building permits soared according to the latest report from the Census Bureau. Privately owned housing starts (e.g., the actual start of construction of a new building) in May were 11.1% below the revised April estimate, but are 5.1% above the May 2014 rate. On the other hand, building permits for housing units were 11.8% above the revised April rate, and 25.4% higher than May 2014. This increase in anticipated new construction is cause for builder optimism according to the National Association of Home Builders. Their housing market index rose 5 points to a reading of 59 for June.
• The Consumer Price Index rose 0.4% in May over April, which is its largest monthly increase since February 2013. According to the Bureau of Labor Statistics, the largest cost increase belonged to energy, particularly gasoline, which increased 10.4%. The index for all items less food and energy increased 0.1% in May following a 0.3% increase in April.

Eye on the Week Ahead

How will the markets respond to results of the FOMC meeting and Chairwoman Yellen’s speech? Will Greece and its creditors reach a bailout resolution? Throughout the second quarter of 2015, the housing market has been consistently trending upward. Will this week’s reports on new and existing home sales show continued growth?

The Markets

Reports from this past week revealed that the number of job openings is increasing, and the federal deficit and crude oil inventories are shrinking, while consumers are spending more of their hard-earned money. Unfortunately, news out of Europe is that negotiations between Greece and its creditors are regressing with default seemingly inevitable. The Dow, which had crept above 18000 during the week, closed at 17898.84, while the S&P 500 moved very little from last week’s close. The Nasdaq lost 0.34%, but remains ahead of the major indexes year-to-date. The Global Dow closed the week ahead of last week, while the euro remained relatively stable against the dollar, finishing the week at $1.1268. Crude oil closed ahead of last week at $59.94 as did gold, which reached $1180.50 as of the end of trading on Friday.

Market/Index	2014 Close	Prior Week	As of 6/12	Weekly Change	YTD Change
DJIA	17823.07	17849.46	17898.84	0.28%	0.43%
Nasdaq	4736.05	5068.46	5051.10	-0.34%	6.65%
S&P 500	2058.90	2092.83	2094.11	0.06%	1.71%
Russell 2000	1204.70	1261.01	1265.02	0.32%	5.01%
Global Dow	2501.66	2556.18	2566.43	0.40%	2.59%
Fed. Funds	0.25%	0.25%	0.25%	0%	0%
10-year Treasuries	2.17%	2.41%	2.39%	-2 bps	22 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

• The number of job openings rose to 5.376 million on the last business day of April, the highest since December 2000, the U.S. Bureau of Labor Statistics reported. The job openings rate for April 2015 was 3.7%, up from 3.5% in March. Open jobs could mean a spike in wages as employers look to fill those positions.
• According to the U.S. Energy and Information Administration for the June 5 week, crude oil inventories dropped 6.8 million barrels, while crude oil imports were down by 750,000 barrels per day. However, refineries increased production, averaging 10 million barrels per day. At the pumps, the national average retail regular gasoline price remained about the same at $2.78 per gallon, $0.894 lower than this time last year.
• Through May the federal deficit for fiscal 2015 was $365.2 billion, which is about 16.3% lower compared to the same period last year ($436.4 billion) according to the monthly Treasury statement. Government receipts are running 9% ahead of last year, although government spending is up about 6% as well.
• Consumers are spending more according to the U.S. Census Bureau, which announced that advance estimates of sales of U.S. retail and food services for May increased 1.2% from April, and 2.7% above May 2014. Big movers were motor vehicle and parts dealers and food services and drinking places, each of which experienced increased sales over May 2014.
• In the week ending June 6, the advance figure for seasonally adjusted initial claims for unemployment benefits was 279,000, an increase of 2,000 from the previous week’s revised level of 277,000, according to the Department of Labor. Yet, this is a far cry from March 2009, when initial claims peaked at 665,000.
• Reflective of higher oil prices, the costs for imported goods increased 1.3% in May following declines in each of the previous 10 months. The Bureau of Labor Statistics also reported that the price of U.S. exports rose 0.6% in May, the largest increase since March 2014. Still, import prices dropped 9.6% on the year. Overall, the strong dollar is making imports cheaper while softness in foreign economies is keeping down export prices.
• In May, the prices producers received for their goods and services increased a seasonally adjusted 0.5% from April according to Friday’s Labor Department report. Still, compared to a year earlier, producer prices are down 1.1%. Next week’s consumer price report may shed more light on inflationary trends.

Eye on the Week Ahead

Housing starts, business production, and jobs reports will be available next week. But most of the attention will be focused on Wednesday’s Federal Open Market Committee announcements and forecasts, along with the Federal Reserve Chair’s press conference. We may have a better idea of when interest rates will increase by the end of the week.

The Markets

Despite drops in consumer confidence, import and export prices, crude oil inventories, and producer prices, the stock market rallied at the end of the week to post positive gains across the board lead by the S&P 500, which closed at an all-time high. However, the biggest gainers for the week were the Nasdaq (0.89%) and the Russell 2000, which gained 0.73% over last week. The domestic market’s positive close to the week may be in response to the rather sluggish economic news, which has increased sentiment that a Federal Reserve interest rate hike is not in the immediate future.

Market/Index	2014 Close	Prior Week	As of 5/15	Weekly Change	YTD Change
DJIA	17823.07	18191.11	18272.56	0.45%	2.52%
Nasdaq	4736.05	5003.55	5048.29	0.89%	6.59%
S&P 500	2058.90	2116.10	2122.73	0.31%	3.10%
Russell 2000	1204.70	1234.93	1243.95	0.73%	3.26%
Global Dow	2501.66	2621.90	2639.52	0.67%	5.51%
Fed. Funds	.25%	.25%	.25%	0%	0%
10-year Treasuries	2.17%	2.13%	2.15%	2 bps	-2 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

• The Treasury Department reported that government receipts in April reached an all-time high. Total receipts came in at $471.8 billion, which created a surplus of $156.7 billion, the largest surplus in the last seven years. Of course, April is generally the biggest tax month of the year, with the bulk of the government’s receipts coming from individual income taxes ($288 billion). Through the first seven months of the budget, the deficit ($282.8 billion) is about 7.7% lower compared to this time last year.
• Compared to February, the March nonfarm jobs market saw fewer job openings (4.99 million vs. 5.14 million) according to the Department of Labor’s Job Openings and Labor Turnover Survey (JOLTS). Yet the number of unemployment claims continued to decrease, down 1,000 for the week ending May 9, while the four-week moving average (271,750) is the lowest level since April 22, 2000. It appears that while employers aren’t hiring at a brisk pace, they’re also not letting employees go either.
• Continuing a trend, U.S. import prices fell 0.3%, while prices for U.S. exports fell 0.7% in April. Compared to last April, import prices are down 10.7% with export prices dropping 6.3%.
• April also saw producer prices fall 0.4%, while industrial production decreased 0.3% for its fifth consecutive monthly loss.
• The Census Bureau’s latest report for April showed virtually no change in advance estimates of retail and food sales compared to March. Sales of autos, furniture, electronics/appliances, and food/beverages all declined, as did department store sales.
• For a second week in a row, crude oil inventories fell, a decrease of 2.2 million barrels from the previous week. Nevertheless, at 484.8 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years.
• Last quarter’s sluggish economy coupled with increasing gas prices at the pumps may have caused a distinct drop in consumer confidence, according to the University of Michigan’s preliminary index of consumer sentiment for May. The 7.3% decrease from April (95.9 to 88.6) is the largest decrease since December 2012.

Eye on the Week Ahead

The week begins with housing data. Will this lagging sector begin to gain momentum during the spring season? And will jobless claims reports continue to show a positive trend?

The Markets

It was a clean sweep for the Nasdaq as it posted gains on all four days of a market week shortened by Martin Luther King Day. As the Nasdaq was moving into positive territory for the year, the other major indices lost ground on Friday, at least in part due to the uncertainty caused by the death of Saudi Arabia’s King Abdullah, but all posted solid gains for the week. The markets generally ignored signs of an economic slowdown in China and the continuing slide in oil prices.

Market/Index	2014 Close	Prior Week	As of 1/23	Weekly Change	YTD Change
DJIA	17823.07	17511.57	17672.60	.92%	-.84%
Nasdaq	4736.05	4634.38	4757.88	2.66%	.46%
S&P 500	2058.90	2019.42	2051.82	1.6%	-.34%
Russell 2000	1204.70	1176.65	1188.93	1.04%	-1.31%
Global Dow	2501.66	2447.65	2501.48	2.2%	-.01%
Fed. Funds	.25%	.25%	.25%	0%	0%
10-year Treasuries	2.17%	1.83%	1.79%	-4 bps	-38 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

• While “deflategate” dominated American airwaves last week, concern about a deflationary spiral of a different kind caused the European Central Bank to announce a qualitative easing program worth at least €1.1 trillion ($1.3 trillion). The ECB hopes this monetary stimulus will increase investment and consumption, and turn around Europe’s stagnating economy.
• Greek drama redux: Greece’s anti-austerity opposition party Syriza, led by Alexis Tsipras, topped vote-getters in Sunday’s election, but fell just two seats short of the number necessary for a parliamentary majority, leading Syriza to announce it would form a coalition government with another anti-austerity party, the Independent Greeks. At risk, with the anti-bailout Syriza party in control, is Greece’s willingness to go along with conditions imposed by its creditors after bailouts in 2011 and 2013, which could prompt fresh concerns about default and a “Grexit” from the eurozone.
• Despite low inventories, existing-home sales bounced back in December and climbed above an annual pace of 5 million sales for the sixth time in seven months, according to the National Association of Realtors^®. Existing-home sales rose 2.4% to a seasonally adjusted annual rate of 5.04 million in December, up from 4.92 million in November, and up 3.5% from last December, the third straight month of year-over-year increases. Median home prices for 2014 rose to $208,500, their highest level since 2007, but total sales fell 3.1% from 2013.
• Meanwhile, the Department of Commerce announced that new residential construction rose to a seasonally adjusted annual rate of 1,089,000, a 4.4% increase over November, and a 5.3% increase over December 2013. Single family home starts rose 7.2% in December, to a seasonally adjusted annual rate of 728,000, the best since 2007.
• The Conference Board’s Leading Economic Index^® for the United States increased 0.5% in December, following a 0.4% increase in November, and a 0.6% increase in October. Ataman Ozyildirim, Economist at The Conference Board, said that “December’s gain in the LEI was driven by a majority of its components, suggesting the short-term outlook is getting brighter and the economy continues to build momentum.”

Eye on the Week Ahead

In what should be a very interesting week, all eyes will be on the Federal Reserve to see how the European stimulus plan might impact the Fed’s plans for U.S. interest rates. And investors will be closely watching for any developments in Saudi Arabia and Greece. Meanwhile, earnings season continues in high gear, with major companies like Apple and Microsoft reporting.

The Markets

A surprise move by Switzerland’s central bank made already unsettled financial markets even more volatile. For the third straight week of 2015, equities saw strong ups and downs that resulted in losses for the week. The uncertainty drove the benchmark 10-year U.S. Treasury yield even further below 2% as demand for a safe haven sent prices higher.

Market/Index	2014 Close	Prior Week	As of 1/16	Weekly Change	YTD Change
DJIA	17823.07	17737.37	17511.57	-1.27%	-1.75%
Nasdaq	4736.05	4704.07	4634.38	-1.48%	-2.15%
S&P 500	2058.90	2044.81	2019.42	-1.24%	-1.92%
Russell 2000	1204.70	1185.68	1176.65	-.76%	-2.33%
Global Dow	2501.66	2459.59	2447.65	-.49%	-2.16%
Fed. Funds	.25%	.25%	.25%	0%	0%
10-year Treasuries	2.17%	1.98%	1.83%	-15 bps	-34 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

• The Swiss National Bank shocked financial markets by deciding not to maintain a cap on the amount the Swiss franc can rise against the common eurozone currency. As a result, both the euro and shares of Swiss companies were hard-hit in the wake of the decision, which was made in anticipation of further weakening of the euro once the European Central Bank meets next week. In other central bank actions, India cut its key interest rate by 25 basis points to 7.75%; it was the first cut in almost two years and is intended to help spur growth.
• The largest monthly decline in U.S. consumer energy costs since December 2008, which included a 9.4% drop in gas prices, was largely responsible for cutting the Consumer Price Index by 0.4% in December. The Bureau of Labor Statistics said that means consumer prices overall have increased only 0.8% over the last 12 months; that’s sharply lower than the 1.3% annual rate recorded in November. Higher costs for shelter and medical care were offset by declines in not only energy but also clothing, air fares, vehicles, and household furnishings.
• The plunging cost of oil also helped cut wholesale prices 0.3% in December, according to the Bureau of Labor Statistics. The decline–the fourth in the last five months–was the sharpest drop in more than 3 years. December’s figure left the wholesale inflation rate for the last 12 months at 1.1%; however, excluding food and energy, the 12-month increase in wholesale prices was 2.1%.
• Early holiday shopping may have helped cut December’s retail sales by 0.9% in the wake of a strong November. The Commerce Department said December’s decline was the largest since January 2014.
• Warmer than usual temperatures in some parts of the United States in December led to reduced production by utilities, which contributed to a 1% decline in the nation’s industrial production. However, the Federal Reserve Board said that aside from utilities, industrial production rose 0.7%. The Fed’s Empire State manufacturing survey showed stronger growth than in November, while its Philly Fed survey showed slower growth.
• Exports from China increased 9.7% in December, according to the country’s General Administration of Customs. Investors took that as an encouraging sign for the global economy as a whole.
• The Federal Reserve’s Beige Book report showed that the U.S. economy continued to expand at a moderate pace in December, with consumer spending increasing in most of the Fed’s 12 districts.

Eye on the Week Ahead

Europe is likely to dominate the coming week’s news. Investors are hoping for additional stimulus measures from the European Central Bank, and will be watching polls in Greece to see if anti-bailout forces are likely to make gains in Sunday’s parliamentary election. Those results could affect the country’s willingness to go along with conditions imposed by its creditors after bailouts in 2011 and 2013, and could prompt fresh concerns about a “Grexit” from the eurozone.

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.

The Markets

A couple of disappointing economic reports coupled with year-end tax maneuvers put the few traders who were at their desks last week in selling mode. All four domestic indices plus the Global Dow lost more than 1%, while the benchmark 10-year Treasury yield fell as prices rose.

Market/Index	2014 Close	Prior Week	As of 1/2	Weekly Change	YTD Change
DJIA	17823.07	18053.71	17832.99	-1.22%	.06%
Nasdaq	4736.05	4806.86	4726.81	-1.67%	-.20%
S&P 500	2058.90	2088.77	2058.20	-1.46%	-.03%
Russell 2000	1204.70	1215.21	1198.80	-1.35%	-.49%
Global Dow	2501.66	2529.85	2491.50	-1.52%	-.41%
Fed. Funds	.25%	.25%	.25%	0%	0%
10-year Treasuries	2.17%	2.25%	2.12%	-13 bps	-5 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

• The growth of U.S. home prices showed signs of slowing in October as the S&P/Case-Shiller 20-City Composite Index saw a -0.1% downturn for the month. October’s 4.5% increase year-over-year also was slightly less than September’s 4.8%. However, 8 cities reported the pace of increases had actually accelerated; two months ago, all 20 cities reported weakening.
• The Institute for Supply Management said its gauge of U.S. manufacturing showed slowing growth. The index reading of 55.5% was 3.2% lower than November’s reading, though any number above 50 indicates expansion.
• Construction spending in the United States fell 0.3% in November, and the Commerce Department said a 1.7% drop in government spending on schools and infrastructure was responsible for much of that decline. However, total construction spending was up 2.4% from last November.

Eye on the Week Ahead

In 2015’s first full week of trading, minutes of the Federal Reserve’s most recent monetary policy committee meeting will be parsed for information about what led to elimination of the “considerable time” language in its most recent statement about future interest rates. And as always, Friday’s unemployment report will be of interest.

Wishing you all an AMAZINGLY SUCCESSFUL 2015 !

The Markets

Grinches were few and far between on Wall Street last week as the Dow industrials topped 18,000 for the first time and the S&P 500 also set yet another new record. Even the small caps of the Russell 2000 participated in the merriment, turning in the best performance of the week. The price of the benchmark 10-year Treasury slipped a bit as the yield rose.

Market/Index	2013 Close	Prior Week	As of 12/26	Weekly Change	YTD Change
DJIA	16576.66	17804.80	18053.71	1.40%	8.91%
Nasdaq	4176.59	4765.38	4806.86	.87%	15.09%
S&P 500	1848.36	2070.65	2088.77	.88%	13.01%
Russell 2000	1163.64	1195.96	1215.21	1.61%	4.43%
Global Dow	2484.10	2508.43	2529.85	.85%	1.84%
Fed. Funds	.25%	.25%	.25%	0%	0%
10-year Treasuries	3.04%	2.17%	2.25%	8 bps	-79 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

• The U.S. economy grew at its fastest pace in 11 years during the third quarter. The Bureau of Economic Analysis said the 5% annualized growth of gross domestic product outpaced Q2’s 4.6% and represented the strongest growth since Q3 2003’s 6.9%. Health care and business investment in buildings and equipment were a large part of the increase. After-tax corporate profits also were up, rising 2.8% from Q2.
• Personal income rose 0.4% in November, but consumer spending rose even more. According to the Commerce Department, consumer expenditures were up 0.6% as falling gas prices left consumers with more money to spend. Meanwhile, disposable income was up 0.5% after adjusting for taxes and inflation.
• Existing home sales slowed a bit in November as the number of homes available for sale fell almost 7%. The National Association of Realtors^® said total sales were down 6.1% for the month, but were 2.1% higher than the previous November. The Commerce Department said new sales of single-family homes also fell 1.6% during the month, and were down 1.6% from a year ago.
• An 8.1% drop in military spending helped cut orders for durable goods 0.7% in November, according to the Commerce Department. It was the third straight month of declines in orders for goods intended to last three years or more. Also, business spending on equipment was basically flat.

Eye on the Week Ahead

As the year winds down in yet another abbreviated week of trading, volumes are likely to continue to be light. A few economic reports are due out, but many traders will be off toasting 2014’s string of record highs and hoping 2015 will bring more of them.