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Weekly Market Update – August 14, 2015

The Dow rose 69 points Friday to finish the week up .6%.  For the year the index is now down 2.0%.

US economic data released Friday showed July industrial production (factory output) exceeded expectations, as did the Producer Price Index (PPI), which rose .2%  in July, a data point that may give the Fed additional ammunition to justify an interest rate increase in September.  Consumer confidence fell slightly from July’s level.

Across the pond, Eurozone Q2 GDP came in below expectations (.3% Q/Q vs. estimates of .4%) while in Greece, the government won parliamentary approval for the country’s new bailout program.  The package passed easily but almost one third of Syriza’s party members abstained or voted no. Prime Minister Alexis Tsipras is expected to call a confidence vote next week, which could lead to snap elections in September and a new government if his current government fails to secure the required support.

The yield on the 10-year Treasury rose 1bps to 2.20%, up 3 bps for the week and the same for the year.  Through Thursday, August 13, our trust preferred portfolios were up approximately 1.50%, on average, year-to-date, versus .55% for the Barclays Aggregate Bond Index. 

Oil fell as low as $41.35 per barrel Friday (a fresh six-year low) but recovered to end the day at $42.50.  Concerns about oversupply and weak Chinese demand continue to pressure the commodity.

Next week’s economic calendar highlights include July housing data on Tuesday and Thursday, inflation data on Wednesday and weekly jobless claims on Thursday.  Expect the housing data (housing starts and existing home sales) to show a slight decrease in activity from June, inflation to remain in check and weekly jobless claims to again fall in the 270-280,000 range (from 274,000 this week).

 

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Ulland Investment Advisors

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