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Weekly Market Update – March 20, 2015

The Dow climbed 169 points Friday as a weaker dollar and a surge in commodities provided the impetus for a rally.  For the week the Dow was up 2.1% and for the year the index is now up 1.7%.

With no major economic news released Friday, a fall in the dollar and subsequent strength in oil and other commodities combined with reaction to Wednesday’s Fed announcement to push indices markedly higher.  The Fed’s statement earlier this week that it will continue to be patient in terms of raising interest rates, saying the economy still had room to improve as economic growth remains moderate and inflation continues to hold well below the targeted rate of 2%, was received positively by the market.  The Fed is still on pace to begin raising rates later this year, most likely in the July – September time frame. 

The yield on the 10-year Treasury continues to fall, dropping another 4 bps Friday to 1.93%, down 18 bps for the week and now down 24 bps for the year.  Through Thursday, March 19, our trust preferred portfolios were up approximately 2.5%, on average, versus 1.27 % for the Barclays Aggregate Bond Index. 

Next week, economic calendar highlights include inflation data and February housing data on Tuesday, weekly jobless claims on Thursday and the third estimate of Q4 GDP and a consumer confidence reading on Friday.  Expect the inflation data to show a slight uptick in prices, the housing data to show a decrease in activity from January, weekly jobless claims to settle in the 300,000 – 310,000 range (from 291,000 this week), Q4 GDP to rise to 2.4% (from 2.2%) and consumer confidence to fall slightly from the previous reading.

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Ulland Investment Advisors

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