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In the Markets – Week-Ending January 13th

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending January 13th 
Crystal Brook Advisors
We Make Financial Planning Crystal Clear

United States:  Import price inflation is back in positive territory following a 0.4 rise in December and upward revision to November’s dip. The 1.8 percent gain in import prices over the past year marks the largest 12-month increase since 2012. (1)  Oil prices were the primary driver of last month’s gain and the recovery over the past year. Imported petroleum prices jumped 7.9 percent following OPEC’s agreement early in the month. (1)  Total consumer credit increased $24.5 billion in November, aided by a $11.0 billion jump in revolving credit. On a year- over-year basis, revolving credit is growing faster than non-revolving credit for the first time since 2008. (1)  Given the sizable jump in consumer confidence to end 2016 and the ever-tightening labor market, revolving credit seems likely to carry its momentum into the new year. (1)

Europe: The pan-European Stoxx 600 ended 0.65 percent lower with most sectors moving south. The FTSE 100 reached yet another record high on Thursday, climbing 0.03 percent higher. The autos sector was the worst performer on Thursday, falling more than 2.8 percent. The U.S. Environmental Protection Agency (EPA) has accused Fiat of using “hidden software” that appeared to make some of its vehicles perform differently in testing than on-road use, according to a Reuters report. The Italian car manufacturers’ shares dramatically fell as much as 20 percent before paring some losses by the close. Fiat said “it believes that its emission control systems meet the applicable requirements”. (2)

Asia: Asian stocks indexes ended the week broadly lower after choppy trading Friday, as markets sought direction after largely trending higher in 2017. (3)  Japan’s Nikkei Stock Average NIK, +0.80%   stood out as the day’s best performer, reversing a large chunk of Thursday’s 1.2% decline as the dollar USDJPY, +0.50%  regained some footing versus the yen. (3)  Financial stocks, which have had the biggest run-up after Trump’s election, were among the biggest decliners. Australia’s “Big Four” banks — Westpac WBC, -1.59%  , Commonwealth Bank of Australia CBA, -1.38%  , National Australia Bank NAB, -1.33%   and Australia and New Zealand Banking ANZ, -1.82%   — were down 1.3% to 1.8%, losing a sizable amount of 2017’s early gains. (3)

Latin America: Mexico’s finance minister Jose Antonio Meade said on Thursday that the country’s exchange rate reflected a very dim investment outlook, a day after the peso currency MXN=D2 hit another historic low against the dollar. ”The exchange rate today reflects a very pessimistic outlook on our ability to attract investment,” Meade said at an event in Mexico City. The peso, which has depreciated amid fears over U.S. President-elect Donald Trump’s policies toward Mexico, broke the 22 peso per dollar mark for the first time on Wednesday. (4)

Monday 1/9
  • The Dow Jones Industrial Average DJIA, +0.19%  fell 76.42 points, or 0.4%, to close at 19,887.38, while the S&P 500 index SPX, +0.31%  lost 8.08 points, or 0.4%, to finish at 2,268.90. The Nasdaq Composite Index COMP, +0.52%  rose 10.76 points, or 0.2%, to end at 5,531.82. (4)
Tuesday 1/10
  • In the United States, the Dow Jones industrial average .DJI fell 0.2 percent, to 19,855.53, while the S&P 500 .SPX ended flat at 2,268.90, as gains in healthcare and financials offset a drop in energy shares. Nasdaq .IXIC, on the other hand, rose 0.4 percent to 5,551.82. (4)
Wednesday 1/11
  • The Dow Jones Industrial Average DJIA, +0.25% rose 98.75 points, or 0.5%, to close at 19,954.28, while the S&P 500 index ESH7, +0.33%  gained 6.42 points, or 0.3%, to end at 2,275.32. The Nasdaq Composite COMP, +0.57% added 11.83 points, or 0.2%, to finish at a record 5,563.65. (3)
Thursday 1/12
  • Stocks closed lower Thursday, wiping out much of Wall Street’s gains from a day earlier and snapping the Nasdaq composite index’s seven-day winning streak. (5)
  • Bank stocks declined the most, hurt by a drop in bond yields, which can lower interest rates on loans and squeeze banks’ profits. Energy and technology stocks also lost ground. (5)
Friday 1/13
  • U.S. financial stocks rose Friday, as the start of banks’ earnings season reignited buying in the sector after its postelection rally had stalled. (6)
  • Shares of J.P. Morgan Chase, Bank of America and Wells Fargo jumped after the banks reported quarterly results. The gains spread to other lenders, sending the KBW Nasdaq Bank index up 1.5%. (6)

Market Close

  • The S&P 500 SPX, +0.18%  added 3 points, or 0.2%, to 2,274 and the Nasdaq Composite Index COMP, +0.48%  climbed 25 points, or 0.5%, to 5,573. (3)

Contributor: Thomas Padula

Sources:  (1),Wells Fargo Economics Group (2),CNBC  (3),MarketWatch (4),Reuters (5),ABC News (6), WSJ