Week in Review with Maureen Kelliher

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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 February 6 - 10, 2017

Although last week was light on major economic releases, overall the week’s reports were positive. Weekly unemployment claims continued to reach multi-decade lows, December’s job openings remained stable, and wholesale trade improved markedly during December. As oil prices bottomed early last year, the year-over-year Import Price Index continued to climb and reached 3.7 percent in January. The Index’s month-over-month increase was healthy as well at 0.4 percent. Finally, the University of Michigan Sentiment Survey fell in January, but nonetheless remained at 95.0, which is an elevated level.

With limited news on the economic front and the majority of fourth-quarter corporate earnings reported, domestic stock markets staged a healthy advance last week. The Dow Jones Industrial Average climbed 1.1 percent while the S&P 500 Index gained 0.9 percent for the week. Industrials were the week’s best performing equity sector having rallied 1.7 percent. Lagging sectors included the materials and energy sectors, as material stocks ended the week flat and energy stocks sank -0.4 percent. International stocks, as represented by the MSCI EAFE Index, did not perform as well as U.S. stocks, ending the week flat overall. Given that wage price pressures eased in January, bonds also staged a decent rally last week. For the week overall, the Barclays U.S. Aggregate Bond Index gained 0.4 percent, U.S. corporate bonds advanced 0.5 percent, while ten-year municipal bonds and high yield bonds ended the week ahead 0.3 and 0.1 percent, respectively.

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Wealth Management Disclosure

 

 

 

  • Initial Unemployment Claims (week of 2/4) 249k est., 234k actual, 260k prior
  • Continuing Claims (week of 1/28) 2058k est., 2078k actual, 2063k prior
  • JOLTS Job Openings (Dec) 5580 est., 5501 actual, 5505 prior
  • Consumer Credit (Dec) $20.000b est., $14.160b actual, $25.205b prior
  • Wholesale Trade Sales MoM (Dec) 2.6% actual, 0.5% prior
  • Wholesale Inventories MoM (Dec) 1% est., 1% actual, 1% prior
  • Import Price Index MoM (Jan) 0.3% est., 0.4% actual, 0.5% prior-R+
  • Import Price Index –ex gas MoM (Jan) 0.0% actual, -0.1% prior –R+
  • Import Price Index YoY (Jan) 3.4% est., 3.7% actual, 2.0% prior
  • Univ. of MI Sentiment (Jan P) 98.0 est., 95.0 actual, 98.5 prior
  • Univ. of MI Expectations (Jan P) 85.7 actual, 90.3 prior
  • Univ. of MI Current Conditions (Jan P) 111.2 actual, 111.3 prior
  • Univ. of MI 1 Year Inflation Expect. (Jan P) 2.8% actual, 2.6% prior
  • Univ. of MI 5-10 Year Inflation Expect. (Jan P) 2.5% actual, 2.6% prior
  • Strong or Improving
  • Inconclusive or lacking trend
  • Weak or declining

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