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Weekly Market Update – Apr. 7, 2017

The Dow finished down on Friday, sliding 7 points to close at 20,656.  For the week, the Dow was flat (S&P 500 -0.3%) and year-to-date is now up 4.5% (S&P 500 +5.2%).  The yield on the 10-year Treasury rose 3 bps Friday to 2.38%, ending the week down 1 bps. 

US economic data were mixed this week. ISM manufacturing index came in at 57.2 as expected. Auto sales were 16,500,000 SAAR, below a consensus of 17,300,000. Factory orders were up 1.0% as expected while durable goods orders were up 1.8% vs. 1.7% expected.  Employment report largely missed expectations with non-farm payrolls increased by 98,000 vs. the 180,000 consensus estimate. On the bright side, unemployment rate dropped to 4.5% from 4.7% while wages were up 2.7% y/y, as expected. New York Fed President Dudley suggested that they may gradually let securities mature without reinvesting the proceeds to begin normalizing the Fed’s balance sheet later this year. Other Fed members echoed his comment.

Oil rose 3.3% this week to $52, down just 3% YTD now. Crude prices hit one-month highs Friday as the U.S. launched airstrikes in Syria, which raised concerns that conflict in the oil-producing regions could spread. Renewed optimism that major crude suppliers will extend their output cuts also helped increase oil prices recently. The OPEC countries will meet at the end of next month to decide whether to extend the 6-month output cuts.

Next week’s economic calendar highlights will include the March NFIB Small Business Optimism Index on Tuesday (4/11), the University of Michigan Consumer Sentiment Index on Thursday (4/13), March inflation data on Thursday and Friday (4/13 & 4/14), and advance retail sales on Friday also. 

Have a great weekend!

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Ulland Investment Advisors

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