It was a wild ride this week with big declines Monday and Tuesday, sharp gains Wednesday and Thursday and a big drop on Friday. Stocks ended the week with little change. Mixed economic data did little to provide an overall direction to the market as factory orders came in below forecast and non-manufacturing services rose less than expected. December jobs came in strong but wages actually declined and initial claims for unemployment in the prior week rose. Part of the negative side of stocks move was blamed on concern that when European Central Bank announces its stimulus it will be too small and also the possibility that elections in Greece will lead to a government intent on leaving the Euro and ultimately defaulting on its debt.
- The Commerce Department reported that the US Trade Gap narrowed in November by 7.7% to a seasonally adjusted $39Billion. The drop was attributed mostly to lower oil prices although other imports were down as well as exports. For the first 11 months of 2014 imports were up 3.3% and exports were up 2.9%
- The Commerce Department also reported that new orders for factory goods fell 0.7% in November marking the second straight month in a row of declines. Also the Commerce Department revised down the November durable goods orders to show a decline of 0.5%.
- The Institute for Supply Management reported that the nonmanufacturing purchasing managers’ index fell to 56.2 in December from 59.3 in November. Anything over 50 represents expansion.
- Consumer prices in the Eurozone fell 0.2% in December from a year ago. This is the first time in five years that Europe has seen an annual fall in consumer prices. This will put more pressure on the European Central Bank to stimulate the economy and pull Europe out of deflation.
- The Labor Department reported Thursday that in the prior week initial claims for unemployment fell 4,000 to a seasonally adjusted 294,000. The four week moving average also fell 250 to 290,500.
- The Labor Department also reported on Friday that nonfarm payrolls rose a seasonally adjusted 252,000 in December. The unemployment rate fell to 5.6%. Both were better than expectations. Also, October was revised up from 243,000 to 261,000 jobs and November was revised up from 321,000 to 353,000. Hourly earnings rose 1.7% for the year more than the price increase of 1.3%. 2014 had 2.95 million job gains, the biggest any year since 1999.