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In the Markets – Week-Ending February 19

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending February 19
Crystal Brook Advisors
We Make Financial Planning Crystal Clear™

United States: A net $29.4B worth of long-term capital flowed out of the U.S. in December as foreign official purchasers were large net sellers of long-term Treasuries, but total inflows for full-year 2015 were strong.(1) PPI for final demand rose 0.1 percent in January. While the overall trend remains soft, weakness is moderate. Energy continues to weigh on the headline, but a pickup in services inflation was broadly based.(2)

Europe: Prime Minister David Cameron and fellow European Union leaders stepped up their efforts to break an impasse over reforming the U.K.’s membership in the bloc.(3)

Asia: The worst-than-expected outturn for Japan is the latest indication that Abenomics (economic policies advocated by Shinzō Abe) is failing to deliver on its promise of economic growth and price stability. Yuan bears say this month’s rally shouldn’t be taken as a sign China’s great reversal in capital flows has finished .(4)

Monday 02/15

• U.S. Markets Closed

Tuesday 02/16

• Total debt has been driven higher by debt that is not secured by real estate, i.e., loans for autos, education and credit cards. We expect mortgage borrowing to accelerate, while remaining below prerecession levels.(4)
• Gold logs worst single-session point loss in about a year.(5)

Wednesday 02/17

• Despite consensus expectations for a slight gain, housing starts tumbled 3.8 percent in January to a 1.099 million-unit rate.(6)
• After three straight monthly declines, industrial production recouped some of the recent lost output by growing 0.9 percent in January.(7)
• Apple has hit back after a US federal magistrate ordered the company to help the FBI unlock the iPhone of one of the San Bernardino shooters.(8)

Thursday 02/18

• The 0.2 percent decline in the Conference Board’s Leading Economic Index (LEI) was driven primarily by a sharp drop in stock prices.(9)
• Decoupling from the Federal Reserve, the Mexican central bank surprised markets by increasing the benchmark interest rate 50 bps to 3.75 percent.(10)

Friday 02/19

• Dollar retreats as skittish investors turn to haven currencies.
• Dallas home sellers, investors enjoy big returns as teardown fever rages.(11)


Market Close
U.S. stocks finished slightly lower Friday as a slide in oil prices resumed, but managed to log their largest weekly gains in three months. The Dow industrials finished down 22.3 points, or 0.1%, at 16,391.10. The S&P 500 finished flat at 1,917.67. The Nasdaq Composite finished 16.89 points, or 0.4%, higher at 4,504.43. Both the Dow and S&P 500 posted their largest weekly gains since Nov. 20, up 2.6% and 2.8%, respectively. Meanwhile, the Nasdaq Composite’s 3.9% weekly gain was its largest since July 17.(11)

Contributor: Felipe Vargas-Zúñiga

(1) Source: U.S. Department of the Treasury, U.S. Department of Commerce and Wells Fargo Securities, LLC
(2) Source: U.S. Department of Labor and Wells Fargo Securities, LLC
(3) Source: Bloomberg
(4) Source: Federal Reserve Bank of New York and Wells Fargo Securities, LLC
(5) Source: MarketWatch
(6) Source: U.S. Department of Commerce, NAHB and Wells Fargo Securities, LLC
(7) Source: Federal Reserve Board and Wells Fargo Securities, LLC
(8) Source: The Guardian
(9) Source: The Conference Board and Wells Fargo Securities, LLC
(10) Source: IHS Global Insight and Wells Fargo Securities, LLC
(11) Source: MarketWatch

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