Economic Update 3-19-2018
- Economic data for the week was highlighted by a drop in retail sales and housing statistics, but gains in industrial production, continued strength in several manufacturing metrics and labor. Inflation results were as expected, reducing fears from last month.
- U.S. equity markets fell back for the week on lackluster news, but were offset by positivity in foreign stock markets. Bonds also gained a bit of ground as interest rates ticked downward under recent highs. Commodities were flattish, although crude oil prices rose during the week.
Economic Update 3-12-2018
- Economic news for the week included a slight decline in the still-strong non-manufacturing ISM index, and a deterioration in the trade deficit, while the employment numbers for February showed strong labor growth yet a tempering in wage growth pressures that have worried markets.
- Equity markets gained in the U.S. and Europe with positive economic data and hopes that tariff talk will be tempered somewhat. Bonds were mixed, with interest rates ticking slightly higher and the U.S. dollar little changed. Commodities gained slightly along with a slight rise in oil prices.
Economic Update 3-06-2018
- Economic data for the week included strong readings for manufacturing, consumer confidence and jobless claims, a slight revision downward in prior-quarter economic growth, but declines in durable goods and new/pending home sales.
- Equity markets suffered due to uncertainty surrounding potential new trade restrictions. Bonds were little changed with interest rates holding steady, but gained slightly as assets moved away from risk. Commodities lost ground following declines in crude oil prices, which was tempered a bit by gains in other segments.
Economic Update 2-26-2018
- In a slower, holiday-shortened week, a sparse amount of economic data was led by a decline in existing home sales, a sharp move higher in leading economic indicators, a strong jobless claims report, coupled with FOMC minutes from January that leaned toward economic optimism.
- U.S. equity markets moved forward on the week, as did emerging markets, while foreign developed markets were held back by a stronger dollar. Bonds were flattish, with little change in interest rates during the week. Commodities were pushed higher by stronger pricing again in crude oil and natural gas.
Economic Update 2-12-2018
- Economic news for the week was light, relative to that of financial markets, but highlighted by gains in the ISM non-manufacturing survey and continued strong labor market data.
- Continuing a trend begun the prior week, stock markets lost more ground, passing through the -10% correction threshold. Bond markets were slightly negative as rates fluctuated before returning to their starting point. Commodities lost ground led by declines in crude oil.
Economic Update 2-05-2018
- Economic news for the week was highlighted by the FOMC keeping interest rates unchanged in their first meeting of the year, Manufacturing surveys showed a bit of a drop while remaining high, housing data showed gains, and the employment situation report came in stronger than expected.
- Global equity markets declined sharply on the week, led by weakness in the U.S. coupled with higher interest rates. These same rates increases also punished bond markets, particularly on the long-term part of the yield curve. Commodities also came in lower, due to a pareback in energy prices for the week.
The first FOMC meeting of the year was uneventful, as expected, with no action on the interest rate policy front, with short-term rates kept to a targeted range of 1.25-1.50%. There were no dissents. As there was also no planned press conference, formal comments and a Q&A session from new Chair Powell will have to wait until March.
The official statement noted several items, including that the labor market has continued to strengthen, and economic activity has been rising at a solid rate. This is in addition to improvements in employment, household and business spending. However, inflation was noted as continuing to run at a sub-target pace, but some progress has been seen recently. This fairly optimistic assessment was largely taken as a sign of another interest rate hike in March, which would be in keeping with their recent pace.