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Weekly Market Update – March 18, 2016

The Dow gained 120 points on Friday, lifted by the continued crude oil price rebound and strong U.S. economic data, and Fed’s decision to leave interest rate unchanged. For the week the Dow was up 2.21% and turned positive (+1%) for the year.

US equities notched their fifth straight week of gains and put Dow and S&P 500 in the positive territory for the year. Industrials outperformed with a weaker dollar driving the rally. Crude settled at $39.33 per barrel, +5.7% for the week. Oil rigs are down 76% from the October 2014 peak and crude stockpiles rose less-than-expected. A meeting between OPEC and Non-OPEC members is expected to happen on April 17th regardless of Iran’s participation.

The FOMC announcement was the week’s primary focus, with the Fed leaving interest rate unchanged and sending dollar sharply lower against euro, yen, and emerging market currencies. The fed decision reflected a strong US economy yet mentioned continued risks from global economic and financial developments. The median projection for the number of 2016 rate hikes is two vs. four in the December report.

In the US, the initial jobless claims increased by 7,000 to 265,000 last week, representing the 54Th consecutive week below 300,000. The Philadelphia Fed manufacturing index increased to 12.4 from negative 2.8, signaling continued economic expansion. Despite strong economic data, the dovish Fed led 10 year treasury yields to retreated 1.9 basis points to 1.877%.

Our office and the market will be closed next Friday, Mar 25th, for Good Friday. Next week’s economic calendar highlights include existing home sales (Mar 21), new home sales and EIA petroleum status report (Mar 23), durable goods orders and jobless claims (Mar 24), and US Q4 GDP (Mar 25).

Have a nice weekend,

Josh Estates and Yansong Pang

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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