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Weekly Market Update – May 15, 2015

The Dow managed a 20-point gain Friday on a relatively quiet trading day.  For the week the Dow gained 0.5% and for the year the index is now up 2.6%.

Economic data released Friday was soft as industrial production (factory output) declined more than anticipated and consumer confidence dropped unexpectedly.  The data underscores the concern that growth in Q2 will be tepid at best, suggesting the Fed won’t act aggressively in raising interest rates this year.

The yield on the 10-year Treasury fell 10 bps Friday to 2.14%, down 1 bps for the week and now down 3 bps for the year. Through Thursday, May 14, our trust preferred portfolios were up approximately 3.5%, on average, versus .42% for the Barclays Aggregate Bond Index. 

Oil fell $.04 to $59.84 Friday, ending the week up 0.6%. Friday’s drill rig report showed the number of rigs drilling for oil declined by another 8 this week to 660, continuing its more than five-month decline. The price of oil is up approximately 34% from its low earlier this year.

Next week’s economic calendar highlights include April housing data on Monday and Thursday, weekly jobless claims also on Thursday and April inflation data on Friday.  Expect the housing data to show an increase in housing starts and existing home sales from March, weekly jobless claims to settle in the 260,000 – 270,000 range (from 264,000 this week) and prices to hold steady from March.

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Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464