Investment Commentary – March 14th, 2017
Market Indices as of Market Close March 14th, 2017
Dow 20,837 (5.88% YTD)
S&P 2,361 (5.76% YTD)
NASDAQ 5,856 (8.37% YTD)
Gold $1,198 (52 Week Low $1,127 High $1,387)
OIL $47.94 (52 Week Low $40.97 High $56.92)
US 10Y Treasury 2.597 (15.23% YTD)
Barclay Bond Aggregate (-0.49% YTD) Our new reporting index to include broad market bond performance
Stocks close lower as weak energy shares drag
U.S. stocks retreated Tuesday as energy shares sold off on the back of weak crude oil prices. April West Texas Intermediate crude CLJ7, -0.93% fell for a seventh session, shedding 68 cents, or 1.4%, to settle at $47.72. Market sentiment also remained cautious as Federal Reserve’s monetary policy meeting got underway. The S&P 500 SPX, -0.34% fell 8 points, or 0.3%, to close at 2,365 as the energy sector dropped 1.1%. The Dow Jones Industrial Average DJIA, -0.21% shed 44 points, or 0.2%, to end at 20,837 while the Nasdaq Composite Index COMP, -0.32% declined 18 points, or 0.3%, to close at 5,856.
LEADERS & LAGGARDS:
This past week’s leaders include Healthcare, technology and consumer goods. Laggards include basic materials, utilities and oil.
Around the Market headlines
OIL SLIDE: Crude oil prices dropped about 9% for the week amid fresh evidence of growing U.S. stockpiles. The prices of U.S. crude fell below $50 on Thursday for the first time this year, and the cumulative decline on Wednesday and Thursday was the biggest two-day drop since June 2016.
ENERGY DRAIN: The decline in oil prices weighed on shares of energy stocks and the broader market. Stocks posted modest declines on the first three days of the week before making a modest comeback on Thursday and Friday.
JOBS STRENGTH: Friday’s monthly employment report was strong on several fronts, as the 235,000 jobs added in February exceeded analysts’ expectations, the estimate of previous months’ gains was revised upward, and the unemployment rate slipped from 4.8% to 4.7%.
YIELDS CLIMB: Recent economic gains and expectations of an interest-rate hike led to a sell-off in the bond market, sending yields higher. The yield of the 10-year U.S. Treasury bond climbed to 2.60% on Thursday, its highest level of the year and close to its highest level since mid-2014.
EURO TIGHTENING?: The European Central Bank on Thursday kept key interest rates unchanged and made no changes to its bond-buying economic stimulus program. ECB President Mario Draghi said that the central bank was becoming more optimistic about economic growth across Europe, fueling expectations that the ECB could become less inclined to approve additional stimulus.
THIS DAY IN FINANCIAL HISTORY: March 14th, 1946 UAW GM Agree To End Strike
175,000 members of the United Auto Workers (UAW) union agreed to go back to work after General Motors offered an increase in wages. However, nationwide price increases and subsequent inflation soon wiped out any gains made by the workers.
On tap for the rest of the week:
Wednesday: U.S. Federal Reserve Board concludes two-day meeting, Chair Janet Yellen holds press conference; Consumer Price Index, U.S. Bureau of Labor Statistics; retail sales, business inventories, U.S. Census Bureau
Thursday: Housing starts, U.S. Census Bureau; Job Openings and Labor Turnover Survey, U.S. Bureau of Labor Statistics
Friday: Thomson Reuters/University of Michigan Index of Consumer Sentiment, preliminary result; industrial production and capacity utilization, U.S. Federal Reserve
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.