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Weekly Update

January 19, 2018

The Economy

 

  • Initial jobless claims sank by 41,000 to a 45-year low of 220,000 in the week ending January 13, as companies continued to retain high numbers of employees’ due to a shortage of skilled labor. The less-volatile four-week moving average dipped by 6,250 to 244,500. The four-week moving average of continuing claims increased by 4,000 to 1.92 million in the week ending January 6, but remained near its 44-year low.

  • The latest Federal Reserve (Fed) Beige Book pointed to a moderate economic expansion; wages gained modestly on labor-market tightness, but most regions saw little inflationary pressure.

  • The Philadelphia Fed Survey showed that regional manufacturing growth expanded during December, although at a slower pace; workforce measurements remained solidly above neutral, indicating optimism about growth in future manufacturing activity.

  • Industrial production rose by a better-than-expected 0.9% in December. Utility production grew by 5.6%, driven by a surge in winter demand for heating; mining production gained 1.6%, supported by an increase in oil and natural-gas extraction.

  • The preliminary estimate of the University of Michigan’s January consumer sentiment index came in lower than December’s reading (particularly within current conditions), but registered sustained strength in consumer expectations.

  • Housing starts dropped by a worse-than-expected 8.2% in December, as homebuilders remained challenged by the cold weather. Instability in single-family home construction offset a slight pickup in the multifamily home segment. Analysts suggested the drop was likely a weather-related aberration and that homebuyer demand remains robust.

  • Mortgage-purchase applications jumped 3% higher in the week ending January 12 despite a rise in mortgage rates, indicating accelerating strength in the housing market. Refinancing activity (which can be sensitive to even small rate changes) climbed by 4% in the same period.

  • Consumer prices in the eurozone rose by 0.4% in December, driven by increased fuel costs; the year-over-year inflation rate was 1.4%, as estimated in an earlier flash report.

  • U.K. retail sales weakened by 1.5% in December as holiday spending was mostly concentrated in November, driven by the Black Friday deals.

  • China’s gross domestic product expanded by 1.6% in the fourth quarter and by 6.8% year over year. A combination of fixed-asset investment and industrial production helped drive growth.

  • Producer prices in Japan edged 0.4% higher in November and grew by 3.5% year over year, driven partly by prices in petroleum and coal. Despite the momentum in producer-price expansion, Bank of Japan officials expect only a gradual increase in consumer prices over the intermediate-term.

    Stocks

  • Global equities were up this week. Emerging markets led developed markets.

  • U.S. equity sector performance was mixed. Consumer staples and healthcare led, while energy and industrials underperformed. Growth stocks had the edge over value stocks and large-company stocks beat small-company stocks.

    Bonds

  • Global bond markets were higher this week. Global government bonds outperformed, followed by corporate bonds; high-yield bonds lagged.

  • Treasury yields rose as investors reacted to market expectations for Fed tightening in 2018.

 

The Numbers as of January 19, 2018

1 Week

YTD

1 Year

Friday's
Close

Global Equity Indices

 

 

 

 

MSCI ACWI ($)

0.7%

4.6%

25.2%

536.7

MSCI EAFE ($)

0.7%

4.4%

25.1%

2141.7

MSCI Emerging Mkts ($)

1.6%

6.0%

37.2%

1227.5

US & Canadian Equities

 

 

 

 

Dow Jones Industrials ($)

1.0%

5.5%

32.1%

26071.7

S&P 500 ($)

0.9%

5.1%

24.1%

2810.3

NASDAQ ($)

1.0%

6.3%

32.4%

7336.4

S&P/ TSX Composite (C$)

0.3%

0.9%

6.1%

16353.5

UK & European Equities

 

 

 

 

FTSE All-Share (£)

-0.7%

0.4%

8.5%

4240.5

MSCI Europe ex UK (€)

0.1%

3.1%

13.9%

1386.8

Asian Equities Topix (¥)

0.7%

4.0%

23.7%

1889.7

Hong Kong Hang Seng ($)

2.7%

7.8%

39.9%

32254.9

MSCI Asia Pac. Ex-Japan ($)

0.9%

4.5%

33.5%

595.5

 

 

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.

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