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Weekly Market Update – February 13, 2015

The Dow gained 47 points Friday on the strength of a rally in oil prices and a better-than-expected Eurozone economic growth report.  For the week the Dow was up 1.1% and for the year it is now up the same.

The combined Q4 GDP of the 18 countries that comprised the Eurozone last year was .3% greater than Q3, above expectations of flat growth.  The Eurozone’s largest economy, Germany, led the way with GDP of .7% in Q4 and 1.6% for 2014, above 2013’s growth of just .1%.  The German economy makes up about 30% of the Eurozone’s $13.2 trillion output.  Growth in France slowed while Greece and Italy continued to experience contraction.
 
Oil rose 2.5% Friday to close at $52.47 per barrel on the heels of a report showing another steep drop in oil drilling rigs.  The total number of oil and gas drilling rigs fell by 98 this week, tying the January 2009 number as the largest drop since 1987.  Oil has risen 18% since its low of $44.45 on January 28.  Crude oil production should flatten by summer and start to fall some thereafter.  In portfolios, energy-related preferreds had strong performance.

Next week’s economic calendar highlights include January housing and inflation data on Wednesday and weekly jobless claims on Thursday.  Expect the housing data to show an uptick in activity from December, inflation data to reflect a decline in prices (mostly related to the fall in energy) and jobless claims to settle in the 290,000 – 300,000 range (from 304,000 this week). 

Markets and our office will be closed on Monday, February 16, in observance of Presidents’ Day.

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Ulland Investment Advisors

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