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Weekly Market Update – February 26, 2016

The Dow pulled back 57 points on Friday after a fairly uneventful trading day. For the week the Dow was up 1.5%, beating last week’s gains, and for the year the index narrowed its losses to 4.5%.

The stock market largely responded to oil prices, which were up 3.2% for the week. Oil bounced after confirmation of a meeting between major producers in mid-March to discuss a potential freeze on output. The G20 summit opened in Beijing on Friday, with a news release suggesting accommodating policy options to stimulate growth rather than competitive currency devaluation. The strength in equities this week was despite intensifying fears of the UK’s exit from the European Union.

Treasury yields rose slightly from 1.75% to 1.76% for the week following strong economic data. Q4 GDP was revised upward to 1.0%, higher than the previous reading of 0.7% and expectations of a 0.5% revision, with inventories being the driver. Core PCE, the Fed’s preferred inflationary measure, increased 0.3% in January, marking the largest increase since January 2012 and pushed the annual inflation rate up to 1.7% last month. Jobless claims were largely in line at 272K; claims have now held below the 300K level for nearly a year.

Next week’s economic calendar highlights include jobless claims on Thursday (Mar 3), unemployment rate and nonfarm payrolls on Friday (Mar 4).

Have a nice weekend,

Natalie Do

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Ulland Investment Advisors

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