Stocks Up, More Data In – Weekly Update

April 3, 2017 | By Steven DiGregorio

With the first quarter of 2017 now behind us, we have seen the three major indexes all gain more than 4.5% so far this year. In fact, the NASDAQ just experienced its best quarter since 2013 due to tech stocks driving growth.

Despite closing down on Friday, the indexes added to their quarterly gains last week. The S&P 500 grew by 0.80%, the Dow was up 0.32%, and the NASDAQ gained 1.42%. At the same time, international stocks in the MSCI EAFE lost 0.26% for the week.

What else happened last week?

• Oil gained on word from OPEC
Oil prices experienced their largest weekly gains in 2017, ending above $50 a barrel. This growth is largely a result of speculation that OPEC (an intergovernmental organization of 13 oil-producing countries) will continue its agreement to curb oil output. By reducing supply, the nations aim to reduce the supply glut that drives prices down.

• Q4 GDP increased with revisions
The final revisions for fourth quarter GDP beat expectations, coming in at 2.1%—up from the previous estimates of 1.9% growth. This plodding growth is in keeping with the economic recovery we have experienced the past several years.

• Inflation hit a key Fed benchmark
When deciding on monetary policy, the Federal Reserve pays close attention to the PCE deflator, an inflation measurement from the Bureau of Labor Statistics. They want to see this data above 2%. We learned last week that in February the PCE deflator hit this level for the first time since 2012. If this trend continues, we could see additional interest rate increases this year.

• Consumer confidence and sentiment remained high
The Conference Board’s March readings for consumer confidence jumped to the highest levels since December 2000, surprising economists who expected the reading to decline from February. The University of Michigan’s consumer sentiment readings also showed an increase for March. However, the Michigan survey’s chief economist pointed out that participants’ sentiment showed a deep partisan divide. With confidence and uncertainty seemingly split along party lines, the effect on spending behaviors remains to be seen.

So far, the first quarter of 2017 has brought market growth and several positive economic data reports—coupled with heated policy debates occurring in government and the media. Moving forward, we will continue to seek the best opportunities to pursue your goals and keep you informed with the information you need to help make solid decisions.

ECONOMIC CALENDAR
Monday: PMI Manufacturing Index, ISM Manufacturing Index, Construction Spending
Tuesday: Motor Vehicle Sales, Factory Orders
Wednesday: ISM Non-Manufacturing Index
Friday: Employment Situation

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, S&P Dow Jones Indices and Treasury.gov. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

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Diversification does not guarantee profit nor is it guaranteed to protect assets.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia.

The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.

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[1] http://www.cnbc.com/2017/03/31/us-markets.html
[2] http://www.cnbc.com/2017/03/31/us-markets.html
[3] http://finance.yahoo.com/quote/%5EGSPC/history?period1=1490328000&period2=1490932800&interval=1d&filter=history&frequency=1d
http://finance.yahoo.com/quote/%5EDJI/history?period1=1490328000&period2=1490932800&interval=1d&filter=history&frequency=1d
http://finance.yahoo.com/quote/%5EIXIC/history?period1=1490328000&period2=1490932800&interval=1d&filter=history&frequency=1d
[4] https://www.msci.com/end-of-day-data-search
[5] https://www.bloomberg.com/news/articles/2017-03-31/oil-holds-rebound-above-50-amid-opec-led-cut-extension-momentum
[6] https://www.bloomberg.com/news/articles/2017-03-31/oil-holds-rebound-above-50-amid-opec-led-cut-extension-momentum
[7] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/3/30/real-gdp-growth-in-q4-was-revised-up-to-a-2.1percent-annual-rate
[8] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/3/31/personal-income-increased-0.4percent-in-february
[9] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/3/31/personal-income-increased-0.4percent-in-february
[10] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/3/31/personal-income-increased-0.4percent-in-february
[11] http://finance.yahoo.com/news/comes-consumer-confidence-133841167.html
[12] http://www.sca.isr.umich.edu/
[13] http://www.sca.isr.umich.edu/
[14] http://www.sca.isr.umich.edu/
[15] http://allrecipes.com/recipe/73208/spinach-and-sun-dried-tomato-pasta/
[16] https://www.irs.gov/uac/keep-in-mind-these-basic-tax-tips-for-the-sharing-economy
[17] http://www.golfdigest.com/story/compress-your-irons
[18] http://www.webmd.com/allergies/features/5-ways-to-beat-spring-allergies#1
[19] http://greenopedia.com/plastic-recycling-codes/

Tags: Consumer, Dow, economy, Fed, GDP, Inflation, interest rate, NASDAQ, Oil, S&P

STEVEN M DIGREGORIO is President of Compass Asset Management Group, LLC and an Investment Advisor Representative with Spire Wealth Management, LLC.
Connect with him on LinkedIn.
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