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Weekly Market Update – January 16, 2015

Stocks rallied Friday, closing higher for the first time in six trading sessions.  The Dow rose 191 points, finishing the week down 1.2%. For the year the Dow is down 1.8%. 

The energy sector led the way Friday, buoyed by oil’s sharp 5.3% rise to $48.69 per barrel in response to the International Energy Agency lowering its 2015 supply forecast for non-OPEC oil producers.  Most of the reduction is projected to come from the output of Canada and Colombia, while the effects of oil’s price decline on US production are so far “marginal.”  The oil rig count continues to fall and has done so by 209 rigs since December 5, the steepest six-week decline since Baker Hughes began tracking the data in July 1987.  We expect the drill rig count to continue to drop as exploration companies reduce capital expenditures in 2015.

Economic data released Friday showed consumer confidence rose markedly from the previous reading in December, while the consumer-price index fell .4% in December, its biggest drop since December 2008. The core CPI, which removes the volatile food and energy sectors, was flat. In the past 12 months, the CPI has risen only .8%, its lowest 12-month reading since October 2009. 

Next week’s economic calendar highlights include December housing data on Wednesday and Friday and weekly jobless claims on Thursday.  Expect the housing activity to show a slight increase in activity from November and weekly jobless claims to settle in the 300,000 – 310,000 range (from 316,000 this week).  Fourth quarter corporate earnings reports will continue next week as well.

Markets and our office will be closed on Monday, January 19 in observance of Martin Luther King, Jr. Day.

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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