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Weekly Market Update – June 10, 2016

The Dow finished 120 points lower on Friday reflecting a more conservative sentiment as global bond yields declined further and concerns about low growth and inflation persisted. However, for the week the Dow was still up 0.3% and year-to-date the index is up 2.5%.

The economic calendar was fairly quiet during the week, with the bulk of released data being positive. Q1 productivity rose 0.7% from last year, in line with expectations, while Q1 unit labor cost and hourly compensation both accelerated from last quarter and beat estimates. Initial jobless claims fell to 264,000, job openings rate rose to a new post-recession high, and quits rate dropped to 2%, suggesting a continued strong market and alleviating concerns from last Friday’s disappointing May jobs report.

On Monday, the Federal Reserve Chairwoman Yellen gave no interest rate hike timing signal but remained optimistic about the economy and reaffirmed expectations of gradual rate increases. The Federal Reserve will hold its June meeting next week. For the week, 10-year Treasury interest rates declined 0.5% due to a lowered possibility of a June rate hike; however, the US Preferred stock index PFF failed to reflect the same trend, ending 0.5% lower.

Crude oil is up 0.7% for the week to $49, fueled by further supply disruptions. However, as current prices make drilling economical for some firms, the Friday U.S. rig count showed a small second week of increase. The strong dollar remained another headwind for crude oil prices.

Next week’s economic calendar highlights include Retail Sales Data (June 14th), the Fed Interest Rate Decision (June 15th), and Core CPI and Initial Jobless Claims (June 16th).

Have a good weekend,

Natalie Do

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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