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Economics

Weekly Economic Update

 

March 9, 2015

(content  provided by third party source)              

JOBS REPORT MIGHT GIVE FED A SIGNAL

Good news on Main Street was not so good for Wall Street. Non-farm employers added 295,000 new workers to payrolls in February, according to the Labor Department; the headline unemployment rate fell to 5.5% while the U-6 rate measuring the unemployed plus underemployed declined to 11.0%. Professional and business sector hiring was up 3.5% year-over-year, construction hiring 5.3%. These labor market improvements weighed on the stock market Friday, with the S&P 500 (-29.78) suffering its biggest one-day loss since January – investors worried that the report would tip the Federal Reserve toward tightening sooner, even with only 2.0% hourly wage growth over the past year.1,2

PERSONAL SPENDING SLIPS IN JANUARY

Rather than spending leftover money resulting from falling gas prices, households seem to be saving it. The Commerce Department said consumer spending lessened 0.2% in January after declining 0.3% in December. Core personal spending (with fuel and energy expenditures removed) did rise 0.3%.3

 

ISM FACTORY PMI SHOWS SMALL DECLINE

February saw the Institute for Supply Management’s manufacturing PMI tail off 0.6 points to a 52.9 mark. ISM’s service sector PMI rose 0.2% to a reading of 56.9, however. In other manufacturing news, January brought a 0.2% retreat in the Federal Reserve’s gauge of factory orders, which had slipped 3.5% in December.1,4

 

STOCKS POST 5-DAY LOSSES

Friday’s selloff left the S&P 500 down 1.58% for the week, the Dow off 1.52% and the Nasdaq down 0.73%. Friday’s settlements for the big three were as follows: S&P, 2071.26; Dow, 17,856.78; Nasdaq, 4,927.37.5

 

THIS WEEK: Monday, Urban Outfitters and Casey’s General Stores report quarterly results. Tuesday brings a report on January wholesale inventories and earnings from VeriFone and Barnes & Noble. Men’s Wearhouse, Rosetta Stone, Shake Shack and Krispy Kreme present earnings Wednesday. Reports on February retail sales, January business inventories and euro area factory output arrive Thursday along with the latest initial claims figures and earnings from Jamba, RE/MAX, El Pollo Loco, FTD, Dollar General and Aeropostale. March’s initial University of Michigan consumer sentiment index appears Friday, along with February’s Producer Price Index.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.19 +8.74 +13.80 +6.33
NASDAQ +4.04 +13.22 +22.36 +13.57
S&P 500 +0.60 +10.35 +16.38 +6.90
REAL YIELD 3/6 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.41% 0.53% 1.48% 1.63%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 3/6/156,7,8,9

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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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.
Citations.
1 – haver.com/ [3/6/15]
2- marketwatch.com/column/market-snapshot?dist=tbeforebell [3/6/15]
3 – reuters.com/article/2015/03/02/us-usa-economy-spending-idUSKBN0LY1DU20150302 [3/2/15]
4 – ism.ws/ISMReport/NonMfgROB.cfm [3/6/15]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [3/6/15]
6 – markets.wsj.com/us [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F6%2F14&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F6%2F14&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F6%2F14&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F5%2F10&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F5%2F10&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F5%2F10&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F7%2F05&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F7%2F05&x=0&y=0 [3/6/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F7%2F05&x=0&y=0 [3/6/15]           
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/6/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/6/15]

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