Speed bump ahead for the
markets; Washington
Markets ended a quiet week
basically flat, though the S&P 500 managed to chalk up its seventh week of
gains. For the week, the S&P 500 gained 0.12%, while the Dow lost 0.08% and
the Nasdaq trimmed 0.06%.[i]
There was quite a bit of
economic data released last week - here are a few highlights: U.S. France ,
Germany , Greece , Italy ,
and Portugal
The holiday-shortened week
will see the release of housing data and minutes from the January Fed FOMC
meeting. Markets could stay in low gear as investors look for signs of future
Fed moves and examine reports on housing data.[v]
Looking ahead, we’re anticipating some market headwind in the form of the March 1st
sequestration deadline that is fast approaching. This automatic series of
federal spending cuts was temporarily extended in January during the fiscal
cliff wrangling to allow Congress and the President more time to negotiate.
However, with no resolution thus far, and Congress in recess this week, it
appears as though the deadline may pass with no action.[vi] Although markets have been ignoring the news thus far, the
effects of sequestration in massive federal budget cuts, lost jobs, furloughs,
and defense cuts[vii] would very likely have a negative effect on markets. While we
never try to make definite predictions, we’re keeping a close eye on what’s going on in Washington
ECONOMIC CALENDAR:
Monday: U.S.
Markets Closed for Presidents’ Day Holiday
Tuesday: Housing
Market Index
Wednesday: Housing
Starts, Producer Price Index, FOMC Minutes
Thursday:
Consumer Price Index, Jobless Claims, PMI Manufacturing Index Flash, Existing
Home Sales, Philadelphia
Notes: All index returns exclude reinvested dividends, and
the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, Treasury.gov. International performance is represented by the iShares
MSCI EAFE Index Fund (ETF). Past performance is no guarantee of future results. Indices are
unmanaged and cannot be invested into directly.
HEADLINES:
G20 countries put off debt cutting. The 20 most economically powerful countries in the world met at a
summit in Moscow Japan
Oil prices drop on weakened manufacturing data. Crude oil fell below $96 a barrel after a report on U.S.
Unemployment drops to three-week low. Unemployment applications fell last week to a seasonally adjusted
341,000. Applications have declined slowly and steadily over the past few
months, indicating that hiring could improve this year.[x]
QUOTE OF THE WEEK:
“Associate with men
of good quality if you esteem your own reputation; for it is better to be alone
than in bad company.” – George Washington
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[iv]
http://news.yahoo.com/instant-view-consumer-sentiment-improves-february-150501716--business.html
[v]
http://blogs.wsj.com/marketbeat/2013/02/15/next-weeks-tape-housing-inflation-and-fed-tea-leaves/
[vi]
http://bostonglobe.com/news/politics/2013/02/15/massachusetts-will-lose-jobs-congress-enacts-sequestration-report-says/JlUZbE1RkHQKgs3VEDzZxI/story.html
[vii]
http://tpmdc.talkingpointsmemo.com/2013/02/white-house-paints-bleak-picture-of-sequestration-consequences.php
[xi]
http://www.businessweek.com/news/2013-02-16/china-misses-hard-landing-as-government-spends-li-daokui-says
