Investment Commentary – April 13th, 2016
Market Indices as of Market Close April 13th, 2016
Dow 17,908 (2.77% YTD)
S&P 2,082 (1.88% YTD)
NASDAQ 4,947 (-1.20% YTD)
Global Dow 2,357 (2,033 52 week low /2,644 high)
10-year Treasury 1.76 (1.53 52 week low /2.50 high)
Gold 1,260 ($1,047 52 week low /high $1,288)
Oil $41.55 ($29.85 52 week low /high $65.39)
Indexes gain at least 1 percent as financial shares lead
Wall Street rallied for a second straight day on Wednesday, led by gains in beaten-down financial shares after JPMorgan’s quarterly results.
The major indexes each ended up at least 1 percent. The S&P 500 finished at its highest level in more than four months, while the Nasdaq registered its highest close of the year and the Dow industrials touched a more than five-month high.
JPMorgan (JPM.N), the No. 1 U.S. bank by assets, reported a quarterly profit that topped low market expectations. Its shares surged 4.2 percent and gave the biggest boost to the S&P 500.
Financials .SPSY, the worst performing sector this year, were the leading group on Wednesday, climbing 2.2 percent. Other big bank earnings are due this week, including reports from Bank of America (BAC.N) and Wells Fargo (WFC.N) on Thursday.
“There have been two really weak legs to this market: energy and financials,” said Rick Meckler, president of Liberty View Capital Management in Jersey City, New Jersey. “The energy market had its rally yesterday, and with financial stocks having its rally today, it’s really put a little support behind stocks.”
JPM Thought Of the Week
One of the big questions on investors’ minds at the start of the year was whether weakness in the US manufacturing sector would spread to the wider economy. Investors were concerned because the services and manufacturing sectors tend not to diverge for substantial periods of time and the manufacturing business surveys were weak. In 2000 the divergence between the manufacturing and non manufacturing surveys of business new orders, good lead indicators of the economy’s health, had been closed by a collapse in the service sector. Recent data suggests that this time around the divergence will be closed by a bounce in the manufacturing sector rather than a further slowdown in the service sector. In short, the US doesn’t look like it’s heading into recession.
U.S. economic activity expanded, several regions see pickup in wage growth: Fed
The U.S. economy continued to expand from late February to early April and low unemployment appears to be spurring an uptick in wage growth, the Federal Reserve said on Wednesday.
Pay increased in all but one of the Fed’s 12 regional bank districts and several reported signs of a pickup in wage growth, the U.S. central bank said in its Beige Book report of anecdotal information collected from business contacts nationwide.
The Fed has signaled caution in lifting interest rates this year as it waits to see if the nation’s economy can shrug off slowing global growth and risks posed by a strong dollar and sustained period of low oil prices.
THIS DAY IN FINANCIAL HISTORY
April 13, 1852 Discount Store Pioneer Born
On this day, Frank Winfield Woolworth was born in Rodman, New York. Woolworth’s first discount store, named the “Great 5 Cents Store,” opened in 1879. It was a forerunner for his later stores, named “Woolworth’s.”
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.