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Weekly Market Snapshot

March 15, 2019

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

The economic data did not have much of an impact on the markets this week. January retail sales (delayed due to the partial government shutdown) rebounded to some extent, but December was revised lower (implying, all else equal, a downward revision to the estimate of 4Q18 GDP growth). The Consumer Price Index rose moderately in January, consistent with the Fed remaining patient.

The grounding of Boeing 737 Max 8 and 9 airliners sent shares of the company lower. Troubles with the Brexit process failed to register much reaction in U.S. markets.

Next week, the focus will be on the Fed. No change in the federal funds target rate is expected, and the policy statement should repeat the notion that the Fed can be “patient” in determining future adjustments. The Fed is likely to announce details of its plan to end the balance sheet unwind (by the end of this year). There will be revised Fed forecasts, a new dot plot, and Powell will hold a post-meeting press conference.


Indices

  Last Last Week YTD return %
DJIA 25709.94 25473.23 10.21%
NASDAQ 7630.91 7421.47 15.01%
S&P 500 2808.48 2748.93 12.03%
MSCI EAFE 1874.70 1858.11 9.00%
Russell 2000 1549.64 1523.63 14.91%

Consumer Money Rates

  Last 1 year ago
Prime Rate 5.50 4.50
Fed Funds 2.40 1.42
30-year mortgage 4.40 4.52

Currencies

  Last 1 year ago
Dollars per British Pound 1.324 1.394
Dollars per Euro 1.130 1.231
Japanese Yen per Dollar 111.70 106.01
Canadian Dollars per Dollar 1.334 1.296
Mexican Peso per Dollar 19.318 18.701

Commodities

  Last 1 year ago
Crude Oil 58.61 61.19
Gold 1295.10 1317.80

Bond Rates

  Last 1 month ago
2-year treasury 2.46 2.50
10-year treasury 2.62 2.66
10-year municipal (TEY) 3.22 3.32

Treasury Yield Curve – 03/15/2019

Chart

As of close of business 03/14/2019


S&P Sector Performance (YTD) – 03/15/2019


Chart

As of close of business 03/14/2019


Economic Calendar

March 20  —  FOMC Policy Decision
March 21  —  Jobless Claims (week ending March 16)
 —  Leading Economic Indicators (February)
March 22  —  Existing Home Sales (February)
March 26  —  CB Consumer Confidence (March)
March 28  —  Real GDP ("3rd" estimate)
March 29  —  Personal Income (February)
 —  Personal Spending (January)
April 4  —  Employment Report (March)
May 1  —  FOMC Policy Decision
June 19  —  FOMC Policy Decision

 

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 March 14, 2019.