The U.S. stock market finished the week largely upward as it continued to rebound from December’s sell-off.  Interest rates also rose with the 10-year treasury yield increasing 6 basis points to 2.70%.  The spread between the 10-year treasury yield and the 2-year treasury yield widened by 2 basis points to 0.18%, but still remains historically narrow.  The price of gold was virtually unchanged, rising only 0.8% to $1,287.90 an ounce.  The U.S. dollar index dropped from 96.18 to 95.66 amid expectation around the Federal Reserve’s interest rate plans.  The price of crude oil posted another a large weekly gain, increasing 7.17% to $51.70 a barrel as comments from Federal Reserve Chairman Jerome Powell helped boost riskier asset classes.

Index               Started Week         Ended Week         Change         Change %         YTD %
DJIA 24,815.0425,983.941,168.904.71%11.39%
Nasdaq 7,453.157,742.10288.953.88%16.68%
S&P 500 2,752.062,873.34121.284.41%14.62%
Russell 2000 1,465.491,514.3948.903.34%12.30%

This Week Economic Highlights

  • International trade data for the month of November was delayed due to the government shutdown, but the median forecast expects the trade deficit to shrink from $55.5 billion to $54 billion.
  • The Federal Open Market Committee (FOMC) minutes from their December meeting showed that, although they decided to hike rates a quarter of a percent, many officials said they “can afford to be patient” with future rate hikes.  Federal Reserve officials also agreed that the policy path ahead is “less clear” amid market volatility and low inflationary pressures.
  • Initial unemployment claims for the week ending January 5th dropped by a significant 15,000 to a total of 216,000.  However, the less volatile 4-week moving average of initial claims rose 2,500 to 221,750.  Continuing unemployment claims, which lag initial claims by a week, dropped 28,000 to 1.72 million.
  • The Consumer Price Index (CPI) fell 0.1% in December as falling gasoline prices dragged the index lower.  Core CPI, which excludes the volatile food and energy components, rose 0.2%.  The year-over-year change in CPI fell from 2.2% to 1.9%, while core CPI remained unchanged at 2.2%.

Quote

“Surplus wealth is a sacred trust which its possessor is bound to administer in their lifetime for the good of the community”.

-Andrew Carnegie

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