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Weekly Market Snapshot

Weekly Market Snapshot

  • 07.14.17
  • Markets & Investing
  • Article

Market Commentary
by Scott J. Brown, Ph.D., Chief Economist
July 14, 2017

Fed Chair Janet Yellen covered no new ground in her monetary policy testimony to Congress, noting that the Fed “continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time to achieve and maintain maximum employment and stable prices.” However, stock market participants were concerned that she could take a more hawkish stance and were relieved that she didn’t. 

The Consumer Price Index (CPI) report got more than the usual attention from financial market participants, although the Fed is focused on future inflation, not past inflation. Still, the headline CPI figures for June came in a little below expectations. Retail sales results for June were weaker than expected (and expectations were relatively poor). However, real wage growth improved and should provide some support for consumer spending growth in the near term. Industrial production rose 0.4% in June, supported by a further rebound in energy exploration (oil and gas well drilling is up 114% since May 2016, but still down 47% from late 2014). Manufacturing output rose 0.2% (+1.4% y/y), trending flat since February. 

Next week, the economic calendar is relatively thin. There could be some reaction to any surprises in Wednesday’s residential construction figures, but the stock market is expected to be driven more by earnings reports and the bond market may look to the stock market for direction.


Indices

  Last Last Week YTD return %
DJIA 21553.09 21287.03 9.06%
NASDAQ 6274.44 6089.47 16.56%
S&P 500 2447.83 2409.75 9.34%
MSCI EAFE 1904.89 1882.57 13.12%
Russell 2000 1425.66 1400.82 5.05%

Consumer Money Rates

  Last 1 year ago
Prime Rate 4.25 3.50
Fed Funds 1.16 0.40
30-year mortgage 4.08 3.60

Currencies

  Last 1 year ago
Dollars per British Pound 1.299 1.334
Dollars per Euro 1.140 1.112
Japanese Yen per Dollar 113.28 105.35
Canadian Dollars per Dollar 1.272 1.289
Mexican Peso per Dollar 17.684 18.354

Commodities

  Last 1 year ago
Crude Oil 46.08 45.68
Gold 1223.30 1332.20

Bond Rates

  Last 1 month ago
2-year treasury 1.33 1.33
10-year treasury 2.38 2.16
10-year municipal (TEY) 3.07 2.85

Treasury Yield Curve – 7/14/2017

Treasury Yield

As of close of business 7/13/2017


S&P Sector Performance (YTD) – 7/14/2017


SP Sector Performance

As of close of business 7/13/2017


Economic Calendar

July 17  —  Empire State Manufacturing Index (July)
July 18  —  Import Prices (June)
 —  Homebuilder Sentiment (July)
July 19  —  Building Permits, Housing Starts (June)
June 20  —  Jobless Claims (week ending July 15)
 —  Philadelphia Fed Index (July)
 —  Leading Economic Indicators (June)
 —  Retail Sales (June)
 —  Industrial Production (June)
June 25  —  CB Consumer Confidence (July)
July 26  —  FOMC Policy Decision (no Yellen press conference)
July 27  —  Durable Goods Orders (June)
July 28  —  Real GDP (2Q17 advance estimate + benchmark revisions)
 —  Employment Cost Index (2Q17)
August 4  —  Employment Report (July)
September 20  —  FOMC Policy Decision (Yellen press conference)

 

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor's returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business July 14, 2017.