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Weekly Market Update – April 15, 2016

The Dow finished down 29 points on Friday on the heels of mixed economic data and weaker crude oil ahead of the production freeze meeting in Doha this weekend. For the week the Dow was still up 1.8% and year-to-date the index is 2.7% higher.

Earnings season officially started on Monday on a positive note as big banks surprised to the upside. As banks beat expectations on revenue, earnings per share, net interest margin, and loan growth, fears about commodity headwinds and market growth subsided. Lower-than-expected provisions for loan losses highlight stable credit quality besides energy. Expense control also helped boost bank earnings. As a result, the NASDAQ bank index is up 6.72% for the week.

Economic data were mixed on Friday with the New York manufacturing index coming in stronger than expected, while March industrial production and consumer sentiment disappointed. Earlier in the week, lower-than-expected jobless claims offset a weak core inflation reading. The IMF cut 2016 global economic growth outlook to 3.2% down from 3.4% in January; however, there was little fallout in the market following the news.

Crude oil started off the week on a positive note, rising all the way to $42 a barrel by late Tuesday due to a weakening dollar and the anticipation of a production freeze following the upcoming meeting in Doha. However, as skepticism set in over how binding an output freeze consensus might be, oil pulled back later in the week. In addition, an IEA report raised further doubts about the impact of a production cap as global oil demand is projected to slow down to 1.2 million from 1.8 million barrels per day in 2015, while the freeze is only expected to limit production at current levels. For the week crude is essentially flat at $40 per barrel.

Next week’s economic calendar highlights include the Doha production freeze meeting (April 17th), housing starts data (April 19th), existing home sales (April 20th) and jobless claims (April 21st).

One operational note: we are in the process of installing a new phone system in our office. All phone numbers will remain the same except for James Skjong’s – his temporary number will be 612.312.1400 until the system is in place, at which time he will revert back to the usual 612.312.1406.

Have a good weekend,

Natalie Do

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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