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Weekly eNews: May 14, 2018

Financial Market Update

Welcome to the StrategicPoint Financial Market Update — a market and economic overview of what occurred last week and what’s up for this week. Please find our market commentary and most recent Blog posts in our StrategicPoint of View®.

Last Week

Boosted by higher oil shares and rebounding tech stocks, the benchmark indexes listed here advanced markedly for the first time in several weeks. Gains were enough to push each of the indexes into the black year-to-date, led by the Nasdaq and the Russell 2000. By last week’s end, each of the indexes posted gains exceeding 2.0%. Not since the week ended April 13 have the indexes listed here posted gains exceeding 1.0%. Investors also may have taken comfort in the presumption that inflation isn’t heading skyward based on the modest increase in the Consumer Price Index. Soft prices may preclude, at least temporarily, the Federal Reserve from increasing interest rates.

The price of crude oil (WTI) continued to surge last week closing at $70.58 per barrel, up from the prior week’s closing price of $68.26 per barrel. The price of gold (COMEX) jumped to $1,319.50 by early Friday evening, up from the prior week’s price of $1,316.70. The national average retail regular gasoline price decreased to $2.845 per gallon on May 7, 2018, $0.001 lower than the prior week’s price but $0.473 more than a year ago.

S&P 500: 2727 (up 2.41% for the week and up 2.02% for the year)
NASDAQ: 7402 (up 2.68% for the week and up 7.24% for the year)
Dow: 24831 (up 2.34% for the week and up 0.45% for the year)
US Treasury 10yr: 2.96% (from 2.95% last week)
Crude Oil (June): $70.70 (from $69.72 last week)
Gold(June): $1,320.70 (from $1,314.70 last week)
USD/Euro: $1.1942 (from $1.1962 last week)

Last Week’s Headlines

  • The Consumer Price Index increased 0.2% in April after falling 0.1% in March. Over the last 12 months, the CPI has risen 2.5%. Gasoline prices (3.0%) led the price increase in energy (1.4%), which essentially carried the overall CPI. The index less food and energy (core prices) rose 0.1% for the month, and 2.1% for the 12 months ended in April. Of particular note, over the past 12 months, prices for energy (7.9%), gasoline (13.4%), and fuel oil (22.6%) have increased substantially.
  • Producer prices moved very little in April, up a scant 0.1% over March, when prices jumped 0.3%. In fact, the bump in prices is attributable to a 0.1% rise in the prices producers got for services — prices for goods were unchanged in April. Not unexpectedly, steel and aluminum prices increased over the month. Producer prices are up 2.6% for the 12 months ended in April.
  • The number of job openings increased by nearly 500,000 in March over February. Hires dropped slightly while total separations increased marginally. Of note, the gap between job openings and hires is 1.125 million, indicating that employers are having a hard time filling positions.
  • The federal government enjoyed the largest April budgetary surplus on record, bolstered by large individual tax deposits. For April, total government receipts were $510.45 billion, while government outlays were $296.12 billion, netting a monthly budget surplus of $214.26 billion. Through the first seven months of the fiscal year, the budget surplus sits at $385.44 billion. Over the same period last year, the federal budget surplus was $344.43 billion — a difference of about $41 billion.
  • S. import prices increased 0.3% in April following a 0.2% decline in March. Prices for U.S. imports rose 3.3% between April 2017 and April 2018. Fuel and petroleum prices notably increased, adding to the overall cost of imports. Prices for U.S. exports rose 0.6% in April, after increasing 0.3% in March. U.S. export prices increased 3.8% over the past year, the largest 12-month increase since a 4.8% rise for the year ended November 2011. Prices for agricultural exports fell 1.2% in April after recording a 3.2% rise in March. China’s shutdown of U.S. soybean imports may have impacted the drop in agricultural export prices.
  • In the week ended May 5, there were 211,000 initial claims for unemployment insurance, unchanged from the previous week’s level. The advance insured unemployment rate rose to 1.3%. The advance number of those receiving unemployment insurance benefits during the week ended April 28 was 1,790,000, an increase of 30,000 from the prior week’s level, which was revised up by 4,000.

This Week

If the recent purchasing managers’ survey responses are any indication, this week’s Federal Reserve report on industrial production should be encouraging. The latest figures on new residential construction for April are also out this week. Building permits and housing starts were strong in March, but bad weather throughout the country slowed housing completions. April’s report should show a more favorable rate of new home completions.

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*Past performance is not indicative of future results. Indices are unmanaged and you cannot directly invest in them. The Nasdaq Composite Index measures all NASDAQ U.S. and non-U.S. based common stocks listed on the Nasdaq Stock Market. The S&P 500 index is based on the average performance of 500 industrial stocks monitored by Standard and Poor’s. The data referred to above was taken from sources believed to be reliable. StrategicPoint Investment Advisors has not verified such data and no representation or warranty, expressed or implied, is made by StrategicPoint Investment Advisors.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

The information contained in this report is not intended as investment, tax or legal advice. StrategicPoint Investment Advisors assumes no responsibility for any action or inaction resulting from the contents herein.

Parts of this report were prepared by Broadridge Investor Communication Solutions, Inc.
Copyright 2018. Part of this content contributed by Forefield, Inc.