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Weekly Economic Update - 4.17.17

PRICES DECLINE IN MARCH

In March, the Consumer Price Index retreated for the first time in 13 months. Its 0.3% dip left annualized consumer inflation at a moderate 2.4%. Fuels, autos, and groceries have all become less expensive recently, according to Bureau of Labor Statistics data. Core consumer prices were up 2.0% in the year ending in March. The Producer Price Index fell just 0.1% in March, with the yearly PPI gain left at 2.3%.1,2

      

RETAIL SALES FALL

March’s 0.2% decrease followed a 0.3% pullback in February. The silver lining? Minus gas and vehicle sales, retail sales were up 0.1% last month. Core retail sales were flat for March.2

 

AN IMPROVEMENT FOR CONSUMER SENTIMENT

Rising to an initial April reading of 98.0, the University of Michigan’s consumer sentiment index improved 2.1 points from its final March level. The index’s current conditions component increased 2.0 points to an outstandingly high 115.2.2

  

A VOLATILE WEEK FOR STOCKS

Selling outweighed buying during this past, abbreviated market week. Across four trading days, the S&P 500 fell 1.12% as U.S. investors considered both corporate earnings and global tensions. The Nasdaq Composite’s weekly losses were slightly deeper at 1.21%; the Dow Jones Industrial Average declined only 0.97%. Friday’s settlements: Dow, 20,453.25; Nasdaq, 5,805.15; S&P, 2,328.95.3,4

 

THIS WEEK: Earnings from Celanese, DISH Network, J.B. Hunt, and Netflix appear Monday. Tuesday, investors review earnings from Bank of America, Charles Schwab, Citrix, Goldman Sachs, Harley-Davidson, IBM, Johnson & Johnson, Kinder Morgan, UnitedHealth, W.W. Grainger, and Yahoo!, along with data on March housing starts, building permits, and industrial output; also, Facebook’s F8 conference begins. Earnings announcements from Abbott Labs, American Express, BlackRock, CSX, eBay, Kaiser Aluminum, Morgan Stanley, Qualcomm, TD Ameritrade, and U.S. Bancorp emerge Wednesday, plus a new Federal Reserve Beige Book. On Thursday, the earnings parade includes Alliance Data, American Airlines, BB&T, BONY Mellon, Briggs & Stratton, D.R. Horton, E*TRADE, GATX, Imax, KeyCorp, Mattel, Nucor, PPG, Philip Morris, Sherwin-Williams, Snap-On, Travelers Companies, Unilever, Verizon, and Visa. March existing home sales figures are out Friday, along with earnings from General Electric, Honeywell International, Rockwell Collins, Schlumberger, Stanley Black & Decker, and SunTrust Banks.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+3.49

+14.10

+11.83

+6.22

NASDAQ

+7.84

+17.37

+18.56

+13.30

S&P 500

+4.03

+11.82

+13.99

+6.03

REAL YIELD

4/14 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.32%

0.24%

-0.25%

2.31%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 4/14/174,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

Citations.

1 - marketwatch.com/story/inflation-falls-for-first-time-in-13-months-cpi-shows-2017-04-14 [4/14/17]

2 - investing.com/economic-calendar [4/14/17]

3 - google.com/finance?q=INDEXDJX%3A.DJI&ei=4PbwWNn_O8-w2AbUyJ7ICQ [4/14/17]

4 - markets.wsj.com/us [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F14%2F16&x=0&y=0 [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F14%2F16&x=0&y=0 [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F14%2F16&x=0&y=0 [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F13%2F12&x=0&y=0 [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F13%2F12&x=0&y=0 [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F13%2F12&x=0&y=0 [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F13%2F07&x=0&y=0 [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F13%2F07&x=0&y=0 [4/14/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F13%2F07&x=0&y=0 [4/14/17]

6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/14/17]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/14/17]  

Weekly Economic Update - 4.10.17

COMPANIES ADDED FEWER WORKERS IN MARCH

Just 98,000 net new jobs were created last month, and some analysts think Winter Storm Stella may have held hiring back. Even so, the Department of Labor’s latest employment report showed the U-3 jobless rate decreasing 0.2% to 4.5%; the broader U-6 rate fell 0.3% to 8.9%. The big factor in both declines: 326,000 people leaving the ranks of the unemployed. If all this seems incongruous, consider that the Bureau of Labor Statistics compiles data from two separate surveys: one focusing on payroll growth; the other, on the employment status of individuals.1

      

STRONG EXPANSION FOR SERVICE, FACTORY SECTORS

Another month, another wave of growth for industry and retail businesses – this was the tale told by the two purchasing manager indices at the Institute for Supply Management. For March, ISM’s service sector PMI came in at 55.2; its factory PMI, at 57.2. The services PMI lost 2.4 points from its February mark; the factory PMI, 0.5 points. Still, these readings were well above the crucial 50 level.2

 

FED MAY START TO REDUCE ITS BALANCE SHEET

According to the minutes of the March Federal Reserve policy meeting, most Federal Open Market Committee members believe that the central bank should begin shrinking its vast portfolio of mortgage-backed securities and Treasuries later in 2017. The minutes noted that whether the FOMC decides to phase out or halt reinvestments, the shift in balance sheet policy “should be communicated…well in advance of an actual change.”3

  

STOCKS MOVE SLIGHTLY LOWER

Wall Street’s three major equity indices pulled back a bit last week. Over five days, the Dow ceded just 0.03% to 20,656.10. But the S&P 500 (closed at 2,355.54) and Nasdaq (closed at 5,877.81) took deeper respective losses of 0.30% and 0.57%. The Russell 2000 slipped 1.54% for the week to 1,364.56; the CBOE VIX “fear index” rose 4.04% to 12.87.4

 

THIS WEEK: On Monday evening, Federal Reserve chair Janet Yellen discusses monetary policy at the University of Michigan. Bank of the Ozarks reports Q1 results Tuesday. Earnings from Delta Air Lines, Fastenal, and Pier 1 Imports arrive Wednesday. On Thursday, the Q1 earnings season gathers steam, with Citigroup, JPMorgan Chase, PNC Financial Services Group, and Wells Fargo all reporting; apart from that, the March Producer Price Index, the preliminary April University of Michigan consumer sentiment index, and a new initial claims report also appear. Friday brings March retail sales figures and the March Consumer Price Index.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+4.52

+17.75

+11.63

+6.45

NASDAQ

+9.19

+21.23

+18.16

+13.78

S&P 500

+5.21

+15.36

+13.70

+6.32

REAL YIELD

4/7 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.44%

0.12%

-0.16%

2.27%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 4/7/174,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

Citations.

1 - forbes.com/sites/maggiemcgrath/2017/04/07/u-s-adds-just-98000-jobs-in-march-missing-expectations-by-a-wide-margin/ [4/7/17]

2 - instituteforsupplymanagement.org/ismreport/nonmfgrob.cfm?SSO=1 [4/5/17]

3 - reuters.com/article/us-usa-fed-minutes-idUSKBN1772G4 [4/5/17]

4 - markets.wsj.com/us [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F7%2F16&x=0&y=0 [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F7%2F16&x=0&y=0 [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F7%2F16&x=0&y=0 [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F5%2F12&x=0&y=0 [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F5%2F12&x=0&y=0 [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F5%2F12&x=0&y=0 [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F5%2F07&x=0&y=0 [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F5%2F07&x=0&y=0 [4/7/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F5%2F07&x=0&y=0 [4/7/17]

6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/7/17]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/7/17]  

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