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03/02/2016
Market Update

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Early indicators for 2016 imply the U.S. economy continues to stabilize despite challenges from global market unrest. Finance ministers for the Group of 20 (G-20) major economies met in Shanghai to discuss slowing growth, market volatility, exchange rates and monetary-easing policies. Oil prices rebounded late in the week on hopes of production cuts.
This Week
  • Early indicators for 2016 imply the U.S. economy continues to stabilize despite challenges from global market unrest. Finance ministers for the Group of 20 (G-20) major economies met in Shanghai to discuss slowing growth, market volatility, exchange rates and monetary-easing policies. Oil prices rebounded late in the week on hopes of production cuts.
  • Home sales were split in January, signaling an uneven housing market recovery. Existing home sales rose 0.4%, defying expectations of a dip; however, sales of newly-built homes declined by 9.2%. The slope for the housing sector is moving upward, but not without volatility.
  • Home prices appreciated by 5.7% from December 2014 through December 2015, though the pace of the increase has eased slightly in recent months, according to both the Case-Shiller Home Price Index and the Federal Housing Finance Authority.
  • Consumer confidence fell in February to a seven-month low of 92.2, according to the Conference Board; this points to reduced consumer spending, which drives two-thirds of the economy.
  • The number of initial jobless claims remained near historic lows in the week ending February 20 despite rising by 10,000 to 272,000, while the less-volatile four-week moving average decreased by 5,250 from the previous week. Continuing claims fell by 19,000 to 2,253,000 for the week ending February 13.
  • Durable-goods orders, a leading indicator for industrial production, jumped 4.9% in January, suggesting that the manufacturing sector may be stabilizing.
  • Gross domestic product, the all-inclusive measure of economic activity, advanced at an annualized 1.0% in the fourth quarter of 2015, higher than initially reported. Inventory restocking was primarily responsible for the upward revision, while consumer spending weakened.
  • The British pound dropped below $1.40 for the first time since 2007, likely due to uncertainty around Britain’s continued membership in the European Union.
  • Bank of Japan Governor Haruhiko Kuroda advised Japanese parliament that the Bank’s stimulus program could expand if deflation continues, taking interest rates further into negative territory or triggering other monetary policy easing measures.
  • Saudi petroleum minister Ali al-Naimi informed energy industry leaders at an annual conference that Saudi Arabia will not cut oil production to help stabilize oil prices, and asserted that excess supply from higher-cost sources (such as U.S. shale fields, Canadian oil sands and deep-water drilling) should be reduced.
  • In an effort to make the Chinese yuan a competitive international currency, the People’s Bank of China eased restrictions on foreign investors in its $7.5 trillion bond market.

 

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