Stocks ended the week mixed despite a rally on Friday following the strong January jobs report. The markets were negatively affected early in the week over uncertainty over executive orders particularly regarding immigration. The FED meeting resulted in no change in short term interest rates. U.S. Treasury yields ended the week modestly lower and commodity prices gained as the dollar fell. International stocks performed better than domestic stocks. Earnings reports were generally strong.
In the numbers this week:
- The Commerce Department reported
- The personal-consumption expenditures index rose 0.2% in December or 1.6% from a year earlier. This is the FED’s preferred measure of inflation and is moving closer to the FED’s goal of 2%. The core PCE inflation rate (which excludes volatile food and energy) rose 0.1% in December and 1.7% from a year ago.
- Consumer spending rose 0.5% in December.
- Incomes rose 0.3% in December.
- The savings rate fell to 5.4% in December from 5.6% in November.
- The S&P Core Logic Case-Shiller Index showed U.S. home prices rose 5.6% in the 12 months ending in November up from the 5.5% increase in October.
- The National Association of Realtors reported that pending home sales rose 1.6% in December and 0.3% from a year ago.
- The Institute for Supply Management reported that its manufacturing purchasing managers index rose to 56.0 in January from 54.5 in December indicating an acceleration in manufacturing.
- The Energy Information Administration’s Weekly Petroleum Data report is attached.
- The Energy Information Administration reported that U.S. field production of crude oil decreased 46,000 barrels in the prior week.
- Baker Hughes reported that oil drilling rigs jumped 17 to 583. Gas drilling rigs were unchanged at 145.
- The Labor Department reported
- Initial claims for unemployment fell 14,000 to a seasonally adjusted 246,000. The prior week was revised from 259,000 to 260,000 initial claims. The four-week moving average of claims, designed to smooth out weekly fluctuations, rose 2,250 to 248,000. Initial claims have now remained below 300,000 for 100 weeks in a row, the longest stretch since 1970 when population and the size of the workforce was lower.
- Non-farm business productivity rose at a seasonally adjusted 1.3% annual rate in the fourth quarter. This follows a 3.5% annual rate of increase in the 3rd quarter. Prior to the third quarter there were three straight quarters of declines, the longest stretch since the 1970s.
- The U.S. added 227,000 jobs in January, beating expectations. The unemployment rate rose to 4.8% due to people re-entering the workforce.
- Factset reported that with 55% of S&P 500 companies reporting, 4th quarter earnings have increased 4.6%.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik Smith
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
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These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Indices mentioned are unmanaged and cannot be invested into directly. Past performance is not a guarantee of future results.