March 6th – Weekly Update

  • U.S. equities finished slightly up for the period with the Dow Jones, S&P 500 and Nasdaq all posting gains. Gold was lower for the week following its largest daily decline of 2017. Oil also dropped. The 10-year U.S. Treasury yield closed at approximately 2.49%.
  • Federal Reserve Chairwoman Janet Yellen stated that a rate increase is “likely to be appropriate” in March providing that upcoming economic data pertaining to inflation and the U.S. labor market aligns with the Fed’s expectations. Yellen added that, “The economy has essentially met the employment portion of our mandate and inflation is moving closer to our 2% objective.”
  • Gross domestic product (GDP) grew 1.6% for all of 2016 compared to a 2.6% expansion in 2015. This is the worst growth rate since 2011.
  • Pending home sales dropped 2.8% in January, against consensus for a 1.0% gain and the prior month’s 0.8% rise. The release cited an inventory crunch amid increased buyer traffic.
  • Consumer confidence for February beat estimates coming in at 114.8 compared to the 111.0 consensus and up from 111.6 in January.
  • Personal income rose 0.4% in January, slightly higher than the prior month’s 0.3% gain. Personal spending disappointed rising 0.2% vs consensus for 0.3% and the prior month’s 0.5% rise.
  • Initial jobless claims hit a new trend low in the latest report. Claims fell 19K to 223K, better than the 244K consensus expectations and the lowest weekly level since March 1973. It was also the biggest weekly decline this year.
  • Headline durable goods orders were up 1.8% in January, better than consensus for a 1.6% gain and ahead of December’s 0.5% decline. The gain followed two consecutive monthly decreases.
  • Core durable orders (non-defense, ex-aircraft) were weak and dropped 0.4% month-to-month against expectations for a 0.5% gain. Prior-month core orders saw a notable downward revision to a 0.4% drop vs the report’s original 0.7% rise.
  • The February Institute of supply management (ISM) manufacturing index came in at 57.7, well ahead of consensus for 56.3 and January’s 56.0 reading. Seventeen of eighteen industries reported growth during the month, with furniture the only decliner.

CPWM Weekly Market Monitor (2017.03.06)