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Weekly Market Update – July 15, 2016

The Dow finished up 10 points on Friday in a quiet trading session after a 5-day rally. For the week the Dow was up 2%, and year-to-date the index is up 6.3%.

“Brexit” concerns subsided as Theresa May was appointed as Prime Minister of the UK on Wednesday, and the new cabinet began to take shape. Expectations of policy support continued to act as tailwinds for the market despite the surprise move to keep rates unchanged on Thursday by the Bank of England (BOE). However, the BOE signaled its willingness to loosen policy at its August meeting, suggesting a potential combination of different easing measures. Expectations of Japanese stimulus also served as a cushion for global equity markets. In the US, St Louis Fed President Bullard suggested that the Fed Funds rate should be kept below 1% for the next few years, given the current low growth environment. The US Preferred Index PFF gained 0.9% for the week.

Economic data were largely favorable this week, with a positive first batch of Q2 earnings. Initial jobless claims were stable at 254,000, better than expectations and just above the multi-decade low in April. Headline PPI Inflation increased 0.5% in June, ahead of consensus and the most significant gain in a year. Retail sales were better than expected, as was industrial and manufacturing production. On the flip side, the consumer sentiment index fell short of expectations due to worries about recent global developments.

Crude oil finished the week at 45.95, up 1%, as the rally on Tuesday was followed by a strong selloff on Wednesday due to poor inventory data. Next week’s economic calendar highlights include Crude Inventories (July 20th), and Initial Claims (July 21st).

Have a good weekend,
Natalie Do


Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464