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Market Week: January 12, 2015

Key Dates/Data Releases1/13: JOLTS survey

1/14: Retail sales, Fed “beige book” report

1/15: Wholesale inflation, Empire State, Philly Fed manufacturing surveys

1/16: Consumer inflation, industrial production, international capital flows

The Markets

It was a grim week, not only in France but in financial markets worldwide. Despite a mid-week bounce, equities prices continued to follow oil on a downward path. The small caps once again bore the brunt of the selling, while the price of oil fell below $50 a barrel. Not surprisingly, U.S. Treasuries benefitted from the world’s black mood; as prices rose, the benchmark 10-year yield dropped below 2% for the first time since May 2013.

Market/Index 2014 Close Prior Week As of 1/9 Weekly Change YTD Change
DJIA 17823.07 17832.99 17737.37 -.54% -.48%
Nasdaq 4736.05 4726.81 4704.07 -.48% -.68%
S&P 500 2058.90 2058.20 2044.81 -.65% -.68%
Russell 2000 1204.70 1198.80 1185.68 -1.09% -1.58%
Global Dow 2501.66 2491.50 2459.59 -1.28% -1.68%
Fed. Funds .25% .25% .25% 0% 0%
10-year Treasuries 2.17% 2.12% 1.98% -14 bps -19 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Headlines

  • Minutes of December’s Federal Open Market Committee meeting showed that the committee’s recent shift to language about “patience” was intended to underscore its desire to remain flexible in dealing with rate hikes, basing decisions on ongoing data rather than a timetable.
  • The addition of 252,000 new jobs in December cut the unemployment rate by 0.2% to 5.6%. According to the Bureau of Labor Statistics, those additions exceeded 2014’s 246,000 monthly average gain. However, hourly wages fell 5 cents to $24.57, though they were 1.7% higher than in December 2013.
  • The pace of growth in the U.S. manufacturing sector slowed in December, according to the Institute for Supply Management. The institute’s most recent survey showed a 3.1% drop from November’s 59.3% reading. However, any figure above 50% represents expansion, and December’s figure was roughly equal to the monthly average for all of 2014.

Eye on the Week Ahead

Monday’s after-hours Alcoa announcement marks the unofficial kickoff to the earnings reporting season for Q4, which could overshadow U.S. inflation and manufacturing data.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/ Market Data (oil spot price, WTI Cushing, OK); (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.