Week of April 8 - 12, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

April 16, 2019

Weekly Economic Review

Weekly Macro Updates

Initial Jobless Claims (April 6) 210k est., 196k actual, 204k prior
Continuing Claims (Mar 30) 1735k est., 1713k actual, 1726k prior
NAHB Housing Market Index (Apr) 63 est., 63 actual, 62 prior
JOLTS Job Openings (Feb) 7550 est., 7087 actual, 7625 prior
CPI Ex Food & Energy YoY (Mar) 2.1% est., 2.0% actual, 2.1% prior
PPI Ex Food & Energy YoY (Mar) 2.4% est., 2.4% actual, 2.5% prior
Real Average Hourly Earnings YoY (Mar) 1.3% actual, 1.9% prior
Import Price Index YoY (Mar) -0.6% est., 0.0% actual, -0.8% prior
Export Price Index YoY (Mar) 0.6% actual, 0.3% prior
University of Michigan Sentiment (Apr P) 98.2 est., 96.9 actual, 98.4 prior
U. of Michigan Current Conditions (Apr P) 114.2 actual, 113.3 prior
U. of Michigan Expectations (Apr P) 85.8 actual, 88.8 prior
Empire Manufacturing (Apr) 8.0 est., 10.1 actual, 3.7 prior
Industrial Production MoM (Mar) 0.2% est., -0.1% actual, 0.1% prior

 Strong or Improving
 Inconclusive or lacking trend
 Weak or declining
R+ Revised up
R- Revised down

Capital Market Implications

Most of the inflation gauges that were reported last week hinted that the moderating inflation trend, which began last summer, might be coming to an end. For the month of March, the Consumer Price Index and the Producer Price Index year-over-year were either in line with expectations or above.  The headline index for both the CPI and PPI was higher than expected while the core (which excludes the more volatile segments of food and energy) remained above 2.0%.  Import and export prices for March reflected a similar change, as both increased more than forecasts and February’s levels were revised higher.  And, after reports out of Asia indicated an upturn in Chinese exports, prices for several bellwether commodities also picked up.  

With market participants awaiting first-quarter corporate earnings reports, trading activity last week was light and stock prices barely budged.  For the week overall, the Dow Jones Industrial Average ended flat while the S&P 500 Index gained 0.6%. As Washington continued to focus on the drug price issue, healthcare stocks were the week’s poorest performers, off -2.4%.  On the other hand, after better-than-expected earnings from JP Morgan, bank stocks caught a bid and the sector rallied 2.1% for the week.  With evidence China’s fiscal and monetary stimulus was finally working, international stocks did well.  Foreign developed markets ended the week ahead 0.3% and emerging markets gained 0.4%.  As evidence of better global growth drove Treasury yields higher on the week, bonds ended mixed overall.  High yield bonds, US corporate bonds and ten-year municipal bonds all rose last week, but the Treasury laden US Barclay’s Aggregate Bond Index fell.