There were several major regulatory events this week. The U.S. Treasury Department tightened rules further on tax inversions, killing a deal between two large pharmaceutical companies. The Justice department sued to block a merger between two large oil services companies on anti-trust grounds. The Labor Department issued new rules for the financial industry for retirement accounts.
Regarding the new “fiduciary rule” we believe in putting our client’s interests first and regulating all financial professionals to this standard. At this point we are working with Cambridge on the details of the regulations and what will be required to fully comply with this. We will keep you posted as this develops.
U.S. stocks market indexes ended a see saw week down. Developed foreign stocks performed better. US treasury yields were little changed. The dollar declined and commodity prices rose. Oil prices rebounded on an unexpected decrease in U.S. inventories and speculation that an April 17th meeting of large oil producers will cap production at January levels. The FED minutes also increased speculation that due to global uncertainty the FED is not likely to raise rates at the meeting later this month.
Looking forward to the coming week companies will start releasing 1st quarter earnings. While declines in S&P 500 earnings have been forecast it is possible that actual earnings will exceed the low expectations. With the April ISM readings of increased manufacturing and non-manufacturing activity we believe that 2nd quarter earnings could show gains from Q1.
In economic news this week:
- The Institute for Supply Management reported that the U.S. service sector accelerated with its nonmanufacturing index rising to 54.5 in April from 53.4 in March.
- The Commerce Department reported that the U.S. trade deficit grew 2.6% in February from January. Exports actually rose 1% for the month but were down 4.2% from a year ago. Imports rose 1.3% in February and 0.3% from a year ago. Interestingly, the U.S. actually has run a trade surplus with the 10 member OPEC block for 10 of the last 12 months due to lower import prices and volumes.
- The Energy Information Administration reported that U.S. crude-oil inventories fell 4.9 million barrels in the prior week from an 80 year high. The decline was mainly due to lower imports and higher refinery activity following maintenance to switch to summer blend gasoline. S. production of crude oil fell 14,000 barrels.
- The Labor Department reported that first time jobless claims fell 9,000 to 267,000 in the prior week continuing the longest streak below 300,000 since 1973. The four week moving average of claims rose 3,250 to 266,750.
- The China Caixin Manufacturing purchasing managers index (private) increased from 48.0 in February to 49.7 in March. Anything below 50 represents contraction so China’s contraction is decelerating.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF® 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
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
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.