Weekly Economic Update

Summit Brokerage Weekly Economic UpdateFED MAY WAIT LONGER TO TIGHTEN

March’s Federal Reserve policy statement provided less forward guidance than many investors expected. As anticipated, the word “patient” disappeared – but the Federal Open Market Committee also lowered its 2015 GDP forecast (to a range of 2.3-2.7%) and nearly halved its 2015 inflation projection (to a range of 0.6-0.8%). Seconding this weaker economic outlook, the Fed indicated it might wait until late 2015 to tinker with interest rates, altering the commonly held perception that a rate hike might be in store before Q2 ends.1

 

OIL PRICES RISE

Light sweet crude rose 3.9% on the NYMEX last week, settling at $45.72 Friday. It was the first winning week in five for the commodity, and a short-term decline in the dollar and lower U.S. rig counts helped. Gasoline advanced 2.0% on the NYMEX for the week, natural gas 2.2% and heating oil 1.2%.2

 

FEWER STARTS, BUT MORE PERMITS

The Census Bureau measured a 17.0% drop in groundbreaking for February, which took housing starts to a 13-month low. Declining builder sentiment, higher construction costs and fewer available parcels were all contributing factors. Building permits increased 3.0% last month; apartment permits jumped 18.3%.3

 

TERRIFIC WEEK FOR U.S. EQUITIES

A little dollar weakness, a rebound in energy prices, easing in Europe, the latest FOMC statement and pleasing corporate earnings all supported a 5-day rally. From March 16-20, the S&P 500 gained 2.66% to settle Friday at 2,108.06. The Dow and Nasdaq posted weekly gains of 2.13% and 3.17% on their way to respective closes of 18,127.65 and 5,026.42.4

 

THIS WEEK: Existing home sales figures for February appear Monday, courtesy of the National Association of Realtors. On Tuesday, February new home sales data arrives from the Census Bureau, and the Street also interprets February’s CPI, manufacturing PMIs for Japan and China and earnings from H.B. Fuller, Sonic and Steelcase. Wednesday brings durable goods data for February plus earnings from Pacific Sunwear, Paychex and Red Hat. In addition to the latest initial jobless claims report, Thursday also brings earnings from Accenture, Restoration Hardware, Lululemon Athletica, ConAgra Foods, GameStop, Fred’s Super Dollar and Scholastic. Friday, the University of Michigan publishes its final March household sentiment survey, the federal government’s final estimate of Q1 growth arrives, and Fed chair Janet Yellen speaks on monetary policy in San Francisco.

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +1.71 +11.00 +13.75 +7.16
NASDAQ +6.13 +16.37 +22.34 +15.04
S&P 500 +2.39 +12.61 +16.35 +7.81
REAL YIELD 3/20 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.17% 0.66% 1.50% 1.80%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 3/20/155,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

For more information on Summit Brokerage Services, visit www.joinsummit.com or contact us at (800) 354-5528.

Summit Brokerage Services is a member of Cetera Financial Group, RCS Capital Corporation’s (NYSE: RCAP) retail investment advice platform.

This blog and website are for informational, educational and discussion purposes only, and the owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. Summit Brokerage Services, Inc., Summit Financial Group Inc., and any of their affiliated entities and principals are not a law firms or an accounting firms, or substitutes for an attorney or accountant. Although topics may be discussed on this blog that may involve legal, accounting, or investment issues, nothing on this blog shall be deemed to constitute the practice of law, legal advice, investment advice, and/or tax advice. Summit Brokerage Services, Inc., and its affiliates do not, and cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies. The content on this blog is “as is” and carries no warranties. You should consult an experienced professional regarding tax consequences of specific transactions.

No reader should act in reliance on anything discussed in this blog without prior consultation with a licensed professional who is qualified to evaluate the reader’s individual facts and circumstances and offer an informed professional opinion with respect thereto. If any reader takes action or makes decisions based solely on the information on this blog without prior consultation with a qualified, licensed professional, the reader does so at his or her own risk and agrees that Summit shall have no liability resulting from such unilateral action or decisions by the reader.

Summit makes every effort to provide accurate and truthful information in its posts on this blog, but in no way expressly or impliedly warrants or guarantees the accuracy of its postings and/or the information posted here by others. All information is believed to be from reliable sources, however we make no representation as to its completeness or accuracy.

Summit may, on occasion, post links to information maintained on other websites. Such links and the information thereon are not under Summit’s control.  The mere appearance of a link to a third party site does not mean that Summit has undertaken a review or approval of the link and/or its contents.  Readers must treat information from third party links at the reader’s own risk, and Summit accepts no liability with respect to such third party information. Please note that the third party’s privacy policy and security practices may differ from Summit Brokerage Services, Inc., Summit Financial Group, Inc. and its subsidiaries’ standards. We assume no responsibility for nor do we control, endorse or guarantee any aspect of your use of the linked site.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

Citations.

1 – thestreet.com/story/13084714/1/meaning-of-fed-policy-statement-depends-on-definition-of-is–surprising-market-reaction.html [3/19/15]

2- marketwatch.com/story/oil-prices-stay-choppy-ahead-of-rig-count-data-2015-03-20 [3/20/15]

3 – eyeonhousing.org/2015/03/housing-production-stumbles/ [3/17/15]

4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [3/20/15]

5 – markets.wsj.com/us [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F20%2F14&x=0&y=0 [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F20%2F14&x=0&y=0 [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F20%2F14&x=0&y=0 [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F19%2F10&x=0&y=0 [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F19%2F10&x=0&y=0 [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F19%2F10&x=0&y=0 [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F21%2F05&x=0&y=0 [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F21%2F05&x=0&y=0 [3/20/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F21%2F05&x=0&y=0 [3/20/15]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/20/15]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/20/15]

Stay Connected

Personalized Industry Newsfeed For You

Thank you. You are now subscribed.

Close