The U.S. stock market ended the week higher as trade talks between the U.S. and China regained optimism.  Interest rates moved lower as the 10-year treasury yield fell by three basis points to 2.41%.  Meanwhile the spread between the 10-year treasury yield and the 2-year treasury yield widened by two basis points to 0.16%.  The price of gold fell 1.22% to $1,297 an ounce as the U.S. dollar gains traction from the British Parliament’s third rejection of the Brexit deal.  That said, the U.S. dollar index (DXY) increased from 96.64 to 97.26.  The price of crude oil rose by 2.24% to $60.18 a barrel as the U.S. oil rig count continues to decline.

Index               Started Week         Ended Week         Change         Change %         YTD %
DJIA 25,764.0025,585.69-178.31-0.69%9.68%
Nasdaq 7,816.287,637.01-179.27-2.29%15.10%
S&P 500 2,859.532,826.06-33.47-1.17%12.73%
Russell 2000 1,535.761,514.11-21.65-1.41%12.28%

This Week’s Economic Highlights

  • February housing starts fell by 8.72% to a seasonally-adjusted annualized rate of 1.16 million.  Housing permits, a more forward-looking indication of housing starts fell by a lesser 1.6% to a seasonally-adjusted annualized rate of 1.3 million.  Despite worse than expected housing data, mortgage rates are also falling which improves the outlook for future housing data.
  • The U.S. trade deficit shrank by 14.6% in January to $51.2 billion after jumping nearly 13% in December as tensions between the U.S. and China disrupted the flow of goods.  More specifically, U.S. exports rose by 0.93% to $207.3 billion while imports fell by a more significant 2.56% to 258.5 billion.
  • Initial unemployment claims decreased by 5,000 to 211,000 for the week ending March 23rd, while its more stable four-week moving average fell by 3,250 to 217,250.  Continuing unemployment claims, which lag initial claims by a week, increased by 13,000 to 1.76 million.
  • Personal Consumption Expenditures (PCE) price index, a measure of inflation, fell by 0.1% in January, decreasing its annual rate from 1.8% to 1.4%.  However, core PCE, which excludes the volatile food and energy prices, rose 0.1% yet its annual rate still fell from 2.0% to 1.8%.
  • Consumer spending, which accounts for nearly 70% of U.S. economic activity, increased by a slight 0.1% in January after falling by 0.6% in December.  Meanwhile incomes rose a modest 0.2% in February after falling 0.1% in January. 

Tidbit

The U.S. stock market posted its best quarterly gain since 2009 as all three major indexes (i.e. S&P 500, Dow Jones, and NASDAQ) recognized at least a 10% gain with the S&P 500 recognizing a 13% gain.

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