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 April 17 - 21, 2017

Overall, last week’s economic releases suggested economic growth remained steady. The index of leading economic indicators, a gauge that is meant to predict economic activity over the next six months, was up a better-than-expected 0.4 percent in March. Housing remained strong; although starts were off, building permits rebounded nicely in March from their February decline. Existing home sales rose a healthy 4.4 percent for the month of March. Manufacturing activity during March, however, was little changed, as industrial production increased slightly and the Chicago Fed National Activity Index remained flat. On a more positive note, April manufacturing activity as represented by the Dallas Federal Reserve Manufacturing Activity report and the preliminary Markit U.S. Manufacturing PMI for April indicated continued expansion.

Last week, prior to the outcome of the first round of French elections (which were held over the weekend) capital markets at home rallied. As such, the Dow Jones Industrial Average rose 0.5 percent while the S&P 500 Index gained 0.9 percent. For the first time this year, small capitalization stocks did well, as the small-cap index climbed 2.6 percent last week. The best performing sector for the week was industrials, which surged 2.1 percent; while the week’s poorest performing sector was energy, off -2.1 percent. International stocks, as represented by the MSCI EAFE Index, ended the week flat. Interest rates traded in a narrow band throughout the week and consequently bond activity was muted. For the week, the Barclays U.S. Aggregate Bond Index, U.S. corporate bonds, and high yield bonds all ended unchanged, while ten-year municipal bonds rose 0.5 percent.

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Week in Review

Securities and other investment products are:

Wealth Management Disclosure

 

Weekly Macro Updates

 

  • Initial Unemployment Claims (week of 4/15) 240k est., 244k actual, 234k prior
  • Continuing Claims (week of 4/8) 2024k est., 1979k actual, 2028k prior
  • Housing Starts MoM (Mar) -3.0% est., -6.8% actual, 5.0% prior-R+
  • Building Permits MoM (Mar) 2.8% est., 3.6% actual, -6.0% prior-R+
  • Industrial Production MoM (Mar) 0.5% est. 0.5% actual, 0.1% prior-R+
  • Capacity Utilization (Mar) 76.1% est., 76.1% actual, 75.7% prior-R+
  • Economic Leading Index (Mar) 0.2% est., 0.4% actual, 0.5% prior-R-
  • Philadelphia Fed Business Outlook (Apr) 25.5 est., 22.0 actual, 32.8 prior
  • Markit U.S. Manufacturing PMI (Apr P) 53.8 est., 52.8 actual, 53.3 prior
  • Markit U.S. Services PMI (Apr P) 53.2 est., 52.5 actual, 52.8 prior
  • Existing Home Sales MoM (Mar) -1.9% est., 4.4% actual, -3.9% prior-R-
  • Chicago Fed National Activity Index (Mar) 0.50 est., 0.08 actual, 0.27 prior-R-
  • Dallas Fed Manufacturing Activity (Apr) 17.0 est., 16.8 actual, 16.9 prior
  • FHFA House Price Index MoM (Feb) 0.4 %est., 0.8% actual, 0.2% prior-R+
  • Strong or Improving
  • Inconclusive or lacking trend
  • Weak or declining

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