Week in Review with Maureen Kelliher
Maureen Kelliher

Each week, Investment Officer and resident economist Maureen Kelliher comments on investment trends and economic news which impact the financial markets.

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Capital Market Implications for the Week of April 9 - 13, 2018

There were a number of inflation gauges reported last week, which (although firmer) continued to climb at a measured pace. Driven by a weak dollar, core PPI was higher than expected at an annual increase of 2.7% whilst core CPI for the last 12 months was inline. Real average hourly earnings were relatively unchanged from February to March and job openings in February were healthy. Recent trade tensions weighed on sentiment indexes and manufacturing releases; small business optimism fell in April from a 13-year high and this month’s Empire manufacturing report dropped precipitously. On the other hand, March retail sales were above expectations and homebuilder confidence remained high.

Although first-quarter earnings announcements commenced with mixed results last week, markets advanced for the second consecutive week. The S&P 500 Index rose 2.0% and the Dow Jones Industrial Average increased 1.8%. Energy stocks were last week’s strongest performers due to concerns with Syria (up 6%), while interest-rate sensitive sectors such as utilities and real estate lagged, off -1.3% and -1.1%, respectively. International markets were positive, with the MSCI EAFE Index gaining 1.5% and emerging markets ahead 0.7%. As bond prices declined but credit rallied last week, the bond market was mixed. The Barclays U.S. Aggregate Bond Index fell -0.2% for the week. U.S. corporates were relatively unchanged while ten-year municipal bonds increased slightly and high yield bonds gained 0.8%.

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Week in Review

Securities and other investment products are:

Wealth Management Disclosure

 

Weekly Macro Updates

 

  • Initial Jobless Claims (Apr 7) 230k est., 233k actual, 242k prior
  • Continuing Claims (week of 3/31) 1843k est., 1871k actual, 1818k prior: R-
  • NFIB Small Business Optimism (Mar) 107.0 est., 104.7 actual, 107.6 prior
  • Producer Price Index YoY (Mar) 2.9% est., 3.0% actual, 2.8% prior
  • PPI Ex Food & Energy YoY (Mar) 2.6% est., 2.7% actual, 2.5% prior
  • Consumer Price Index YoY (Mar) 2.4% est., 2.4% actual, 2.2% prior
  • CPI Ex Food & Energy YoY (Mar) 2.1% est., 2.1% actual, 2.1% prior
  • Real Average Hourly Earnings YoY (Mar) 0.4% actual, 0.3% prior: R-
  • Import Price Index YoY (Mar) 3.8% est., 3.6% actual, 3.4% prior: R-
  • NAHB Housing Market Index (Apr) 70 est., 69 actual, 70 prior
  • JOLTS Job Openings (Feb) 6024 est., 6052 actual, 6228 prior: R-
  • University of Michigan Sentiment (Apr P) 100.3 est., 97.8 actual, 101.4 prior
  • Retail Sales Ex Auto & Gas MoM (Mar) 0.4% est., 0.3% actual, 0.3% prior
  • Empire Manufacturing (Apr) 18.4 est., 15.8 actual, 22.5 prior
  • Strong or Improving
  • Inconclusive or lacking trend
  • Weak or declining

R+ Revised up
R- Revised down

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