You are here

Weekly Update

January 12, 2018

The Economy

 

  • Retail sales showed a solid 0.4% gain in December, supported by the holiday season and high consumer confidence in the economy that translated into a willingness to spend.

  • Job openings (a measure of labor demand) remained at a historically strong level in November despite falling from 5.93 to 5.88 million, according to the Department of Labor’s Job Openings and Labor Turnover Survey. Hires slowed by 104,000 to 5.49 million and continued to lag the number of available jobs. Analysts suggested that the survey’s low quit-rate reading indicated there could be pressure on employers to increase wages in the near future.

  • Initial jobless claims grew by 11,000 to 261,000 in the week ending January 6, expending for the fourth consecutive week. The more stable four-week moving average rose by 9,000 to 250,750. Continuing claims fell by 35,000 to a 44-year low of 1.87 million in the week ending December 30.

  • Import prices edged 0.1% higher in December, as elevated energy costs were countered by a drop in non-fuel prices. Year-over-year growth climbed by 3.0%, as a weak U.S. dollar continued to support underlying inflation. Export prices eased by 0.1% in December, bringing the year-over-year gain to 2.6%.

  • Consumer prices grew by 0.1% in December and by 2.1% year over year; higher housing and medical-care costs offset the effects of declining energy prices. The more-closely-followed core rate (which excludes food and energy) crept up to 1.8%. Producer prices softened by 0.1% for the month, the first decline in more than a year, primarily due to lower trade-service prices.

  • Outstanding consumer credit (which measures non-mortgage debt) increased by 8.8% in November, the fastest pace in more than two years, following a 6.5% expansion in October. Revolving credit reached a one-year high, offering confidence in near-term consumer spending—but also suggesting a possible lack of sustainability as debt burdens increase.

  • Mortgage-purchase applications jumped 5% higher in the week ending January 5 despite a slight rise in mortgage rates, indicating accelerating strength in the housing market. Refinancing activity (which can be sensitive to even small rate changes) surged by 11% in the same period.

  • Industrial production in the eurozone rallied by 1.0% in November; gains in capital goods, consumer durables and intermediates piloted the overall improvement.

  • Industrial production in the U.K. climbed by 0.4% in November (as anticipated, thanks to mining and quarrying) and slowed in the annual period (by less than expected) to 2.5%. Manufacturing output expanded in the month, primarily within chemicals and rubber and plastic products, but at a slower rate than in October; the sector gained 3.5% year-over-year.

  • Consumer prices in China increased by 1.8% from a year ago in December. Producer prices strengthened by 4.9% in the same period.U.S. Economic Calendar

  • January 17: Mortgage Applications, Industrial Production

  • January 18: Housing Starts, Jobless Claims, Philadelphia Fed

  • January 19: Consumer Sentiment

    Stocks

  • Global equities were up this week. Developed markets were higher, while emerging markets lagged.

  • Most U.S. equity sectors were positive. Industrials and energy led, while telecommunications and utilities underperformed. Value stocks had the slight edge over growth stocks and small-company stocks beat large-company stocks.

    Bonds

  • Global bond markets were unchanged this week. Global government bonds outperformed, while high-yield bonds and corporate bonds lagged.

  • Treasury yields rose as investors reacted to worries over foreign demand for the U.S. government bonds after news that China could start to halt its Treasury purchases.

The Numbers as of January 12, 2018

1 Week

YTD

1 Year

Friday's
Close

Global Equity Indices

 

 

 

 

MSCI ACWI ($)

0.6%

3.3%

23.0%

529.7

MSCI EAFE ($)

0.6%

3.0%

22.7%

2113.1

MSCI Emerging Mkts ($)

-0.3%

3.3%

33.5%

1197.0

US & Canadian Equities

 

 

 

 

Dow Jones Industrials ($)

2.0%

4.4%

29.7%

25803.2

S&P 500 ($)

1.6%

4.2%

22.7%

2786.2

NASDAQ ($)

1.7%

5.2%

30.9%

7261.1

S&P/ TSX Composite (C$)

-0.3%

0.6%

5.7%

16302.6

UK & European Equities

 

 

 

 

FTSE All-Share (£)

0.5%

1.1%

8.1%

4268.9

MSCI Europe ex UK (€)

0.0%

2.7%

13.6%

1381.5

Asian Equities

Topix (¥)

-0.2%

3.2%

22.2%

1876.2

Hong Kong Hang Seng ($)

1.9%

5.0%

37.6%

31412.5

MSCI Asia Pac. Ex-Japan ($)

-0.3%

2.8%

31.2%

585.7

 

The Numbers as of                 1 Week

January 12, 2018

YTD

1 Year

Friday’s
Close

Latin American Equities

 

 

 

MSCI EMF Latin America ($)               -0.2%

4.7%

21.2%

2961.9

Mexican Bolsa (peso)                         -1.5%

-0.4%

6.7%

49150.4

Brazilian Bovespa (real)                        0.4%

3.9%

24.1%

79349.1

Commodities ($)

 

 

 

West Texas Intermediate Spot              4.7%

6.4%

21.3%

64.3

Gold Spot Price                                  0.9%

2.0%

11.0%

1331.9

Global Bond Indices ($)

 

 

 

Barclays Global Aggregate ($)               0.0%

-0.1%

6.4%

484.2

JPMorgan Emerging Mkt Bond             -0.4%

0.0%

7.8%

807.7

10-Year Yield Change (basis points*)

 

 

 

US Treasury                                            7

14

19

2.55%

UK Gilt                                                   9

15

4

1.34%

German Bund                                         14

15

27

0.58%

Japan Govt Bond                                     2

3

4

0.08%

Canada Govt Bond                                   2

13

52

2.18%

Currency Returns**

US$ per euro                                     1.5%

 

1.7%

 

15.0%

 

1.220

Yen per US$                                     -1.8%

-1.5%

-3.2%

111.01

US$ per £                                          1.3%

1.7%

13.0%

1.374

C$ per US$                                        0.5%

-0.8%

-5.1%

1.247

Source: Bloomberg. Equity-index returns are price only, others are total return. *100

basis points = 1 percentage point. **Increases in U.S. dollars (USD) per euro or pound

indicate a decline in the value of the USD; increases in yen or Canadian dollars per USD indicate an increase in the value of the USD.

 

Disclaimer:

This information is not meant as a guide to investing, or as a source of specific investment recommendations, and Gibraltar Private Bank & Trust makes no implied or express recommendations concerning the manner in which any client’s accounts should or would be handled, as appropriate investment decisions depend upon the client’s investment objectives. The information is general in nature and is not intended to be, and should not be construed as, legal or tax advice. In addition, the information is subject to change and, although based upon information that Gibraltar Private Bank & Trust considers reliable, is not guaranteed as to accuracy or completeness. Gibraltar Private Bank & Trust makes no warranties with regard to the information or results obtained by its use and disclaims any liability arising out of your use of, or reliance on, the information.

Investment Product: Not FDIC Insured • No Bank Guarantee • May Lose Value • Not a Deposit • Not Insured by Any Federal Government Entity

Disclosures:

Index returns are for illustrative purposes only and do not represent actual fund performance.

Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

This material is provided by SEI Investments Management Corporation (SIMC) for educational purposes only and is not meant to be investment advice. The reader should consult with his/her financial advisor for more information. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. There are risks involved with investing, including possible loss of principal. SIMC is a wholly owned subsidiary of SEI Investments Company.

Member FDIC •  Equal Housing Lender