U.S. and foreign stocks rose this past week after several weeks of declines. Stocks were buoyed by dovish comments in the FED minutes that were released Wednesday and generally better than expected economic numbers. The FED minutes showed most members were very concerned about market volatility, strength in the dollar and weaker credit spreads (high yield bond yields going higher while treasury yields fell). Manufacturing surprisingly increased in January. According to Factset with 87% of S&P 500 companies reporting, earnings have declined 3.6% in the fourth quarter.
In particular this week:
- The Labor Department reported
- Producer prices rose 0.1% in January. Excluding volatile food and energy producer prices rose 0.4%, much more than expected.
- Consumer prices were unchanged in January. Excluding food and energy consumer prices rose 0.3%, the largest monthly increase in more than four years.
- First time claims for unemployment fell 7,000 to 262,000 in the prior week better than economists’ forecasts and near a four decade low. The four week moving average of claims also fell 8,000 to 273,250.
- The Commerce Department reported that U.S. housing starts fell a seasonally adjusted 3.8% in January. Both single family and multi-family housing fell. New applications for building permits also fell 0.2%. Colder winter weather and a snowstorm in the Northeast was blamed for the decline following a much milder than normal December.
- The Energy Information Administration reported that the U.S. crude oil inventories rose 2.1 million barrels.
- The Federal Reserve reported that industrial production (includes manufacturing, mining and utilities) rose 0.9% in January the biggest increase since May 2010. A surge in utilities due to the normal January was a contributing factor but so was auto manufacturing. December’s production was revised to a negative 0.7%. and year over year industrial production declined by 0.7%. The three components of industrial production have done the following over the past year:
- Factory Output up 1.2%
- Utility production down 5.4%
- Mining production (including oil and gas) was down 9.8%.
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.