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Archive for March, 2015

Weekly Market Update – March 27, 2015

The Dow broke a four-day losing streak Friday, climbing 34 points after falling over 400 points the previous four sessions.  For the week the Dow was down 2.3% and for the year the index is now down .6%.

Markets took a breather on Friday on what was a relatively calm day.  A consumer confidence report came in better than expected and the third and final estimate of Q4 GDP held steady at 2.2%, but neither had much effect on the day’s trading.  Fed Chairwoman Janet Yellen spoke late Friday afternoon and produced both dovish and hawkish remarks with respect to the impending interest rate increase.  Yellen stated that though the economy remains weak by historical standards and core inflation has not yet reached favorable levels, a rate increase may be warranted this year (as we know).  However, prolonged weakness in prices and wages could postpone the first rate hike in nine years.  Given those remarks, the consensus is that the Fed will begin to raise rates in sometime in early fall, perhaps September or October.  First quarter corporate earnings, which will begin to be announced in early April, will play a role in the Fed’s strategy as attention will be paid to what impact the strong dollar has had on earnings.

The yield on the 10-year Treasury fell 6 bps Friday to 1.95%, up 2 bps for the week and now down 22 bps for the year.  Through Thursday, March 26, our trust preferred portfolios were up approximately 2.5%, on average, versus 1.17 % for the Barclays Aggregate Bond Index. 

Next week, economic calendar highlights include a March manufacturing report and consumer confidence reading on Tuesday, weekly jobless claims on Thursday and the March jobs report on Friday.  Expect the manufacturing report to show an uptick in activity from February, consumer confidence to fall slightly, weekly jobless claims to settle in the 290,000 – 300,000 range (from 282,000 this week), and the jobs report to show 260,000 jobs created in March (down from 295,000 in February) and the unemployment rate to remain at 5.5%. 

Markets and our office will be closed next Friday, April 3, in observance of Good Friday.

Weekly Market Update – March 20, 2015

The Dow climbed 169 points Friday as a weaker dollar and a surge in commodities provided the impetus for a rally.  For the week the Dow was up 2.1% and for the year the index is now up 1.7%.

With no major economic news released Friday, a fall in the dollar and subsequent strength in oil and other commodities combined with reaction to Wednesday’s Fed announcement to push indices markedly higher.  The Fed’s statement earlier this week that it will continue to be patient in terms of raising interest rates, saying the economy still had room to improve as economic growth remains moderate and inflation continues to hold well below the targeted rate of 2%, was received positively by the market.  The Fed is still on pace to begin raising rates later this year, most likely in the July – September time frame. 

The yield on the 10-year Treasury continues to fall, dropping another 4 bps Friday to 1.93%, down 18 bps for the week and now down 24 bps for the year.  Through Thursday, March 19, our trust preferred portfolios were up approximately 2.5%, on average, versus 1.27 % for the Barclays Aggregate Bond Index. 

Next week, economic calendar highlights include inflation data and February housing data on Tuesday, weekly jobless claims on Thursday and the third estimate of Q4 GDP and a consumer confidence reading on Friday.  Expect the inflation data to show a slight uptick in prices, the housing data to show a decrease in activity from January, weekly jobless claims to settle in the 300,000 – 310,000 range (from 291,000 this week), Q4 GDP to rise to 2.4% (from 2.2%) and consumer confidence to fall slightly from the previous reading.

Weekly Market Update – March 13, 2015

The Dow fell 146 points Friday as a strong dollar and weak inflation data pressured stocks.  For the week the Dow was down .6% and for the year it is now down .4%.

The dollar surged Friday to a new 52-week high while inflation data came in well below expectations (PPI -.5% vs. expectations of .3%).  The strong dollar pushed oil prices down over 4% to $45.15 per barrel, down 9.3% for the week.  The market recently has been fixated on the impending interest rate hike, and next week the Fed will meet and release its March statement on Wednesday.  Close attention will be paid to whether the term “patient” is removed from the Fed’s language (in terms of its policy intentions).        

The yield on the 10-year Treasury rose 2 bps Friday to 2.11%, down 13 bps for the week and now down 6 bps for the year.  Through Thursday, March 12, our trust preferred portfolios were up almost 3.5%, on average, versus .76% for the Barclays Aggregate Bond Index. 

Next week, economic calendar highlights include February housing data on Tuesday and weekly jobless claims on Thursday.  Expect the housing data to show an uptick in activity from January and weekly jobless claims to settle in the 300,000 – 310,000 range (from 289,000 this week). 

Weekly Market Update – March 6, 2014

Good news was bad news for the market Friday as a better-than-expected February jobs report stoked fears that an interest rate hike could come sooner than expected.  The Dow fell 280 points.  For the week the Dow was down 1.5% and for the year it is now flat.

The February employment report showed a gain of 295,000 jobs (above estimates of 240,000).  The unemployment rate fell to 5.5% from 5.7%.  The strong jobs report increases the likelihood of a rate increase, perhaps as early as June. 

Oil fell 1.9% Friday to close at $49.78, up .5% for the week.  Natural gas closed slightly higher on the day.  The yield on the 10-year Treasury rose 13 bps Friday to 2.24%, up 24 bps for the week and now up 7 bps for the year. Through Thursday, March 5, our trust preferred portfolios were up over 4.5%, on average, versus .74% for the Barclays Aggregate Bond Index. 

Next week, weekly jobless claims and February retail sales on Thursday and inflation data and a consumer confidence reading on Friday highlight the economic calendar.  Expect weekly jobless claims to settle in the 310,000 – 320,000 range (from 320,000 this week), retail sales to show improvement from January, inflation to rise slightly and consumer confidence to decline from January.

 

Ulland Investment Advisors

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