FED: APRIL MIGHT BE TOO SOON FOR A RATE HIKE
That was the message Wall Street gleaned from the Federal Reserve’s March policy meeting minutes. Several Fed officials, the minutes stated, felt that “raising the target range as soon as April would signal a sense of urgency” that would be untimely. Another passage noted broad support for “a lower path of the federal funds rate relative to December” (in other words, a shallower ascent for the benchmark interest rate across 2016). Still, some officials saw merit in an April rate move should economic indicators show significant upside.1
PACE OF GROWTH PICKS UP IN THE SERVICE SECTOR
In March, the Institute for Supply Management’s non-manufacturing PMI rose 1.1 points to 54.5. It was the first gain for that PMI in five months. The index had a reading of 56 or higher during most of 2015.2
OIL JUMPs 8% IN A WEEK; GOLD, SILVER ALSO RISE
West Texas Intermediate crude settled at $39.72 a barrel Friday, its weekly ascent aided by a 6.6% Friday gain helped by an announcement of declining rig count. Gasoline futures were up 4.4% for the week. April 4-8 also represented the best week for gold and silver since mid-March (in fact, it was silver’s finest week in over a month). Gold advanced 1.7% in five days on the COMEX, closing Friday at $1,243.80 an ounce. Silver futures rose 2.0% in the same interval, settling Friday in New York at $15.38 per ounce.3,4
STOCKS LOSE SOME GROUND
A rocky week ended with 5-day losses for each of the major indices: the S&P 500 fell 1.21% to 2,047.60; the Nasdaq Composite, 1.30% to 4,850.69; and the Dow Jones Industrial Average, 1.21% to 17,576.96. Even so, all three benchmarks were up at least 3.4% month-over-month at Friday’s closing bell.5
THIS WEEK: Earnings season starts Monday as Alcoa presents Q1 results. On Tuesday, earnings emerge from CSX Corporation and Fastenal. Wednesday, investors consider March retail sales numbers, a new Fed Beige Book, the March PPI, and Q1 results from JPMorgan Chase and Pier 1. New initial claims figures and the March CPI arrive Thursday, plus earnings news from Bank of America, BlackRock, Delta Air Lines, Progressive, and Wells Fargo. Friday offers the preliminary edition of the University of Michigan’s April consumer sentiment index, a report on March industrial output and earnings announcements from Charles Schwab, Citigroup, Regions Financial, and Seagate Technology.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||4/8 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.14%||0.08%||0.95%||2.43%|
Sources: wsj.com, bigcharts.com, treasury.gov – 4/8/166,7,8,9
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.
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Own a business? Think about having an accountant look at your books several times a year. Having a professional opinion on your books can be valuable at any time, not just tax time.
Three women each have two daughters.
They are all having dinner at a cafe.
The café has but seven chairs. All the women are seated. How is this possible?
Last week’s riddle:
You have 7 onions in a bag, and you will distribute them to 7 people. As you finish handing them out, there is still 1 onion left in the bag. How is this possible?
Last week’s answer:
As you hand out the last onion, you leave it inside the bag.
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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.
1 – tinyurl.com/jsu4hrx [4/7/16]
2 – businessinsider.com/ism-non-manufacturing-and-markit-services-pmi-2016-4 [4/5/16]
3 – marketwatch.com/story/oil-rebounds-but-doha-meeting-remains-a-cloud-on-the-horizon-2016-04-08 [4/8/16]
4 – marketwatch.com/story/gold-snubbed-for-riskier-assets-clings-to-weekly-gain-2016-04-08 [4/8/16]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [4/8/16]
6 – markets.wsj.com/us [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F8%2F15&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F8%2F15&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F8%2F15&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F8%2F11&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F8%2F11&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F8%2F11&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F7%2F06&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F7%2F06&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F7%2F06&x=0&y=0 [4/8/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/8/16]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/8/16]