Market Commentary by Scott J. Brown, Ph.D., Chief Economist
The economic calendar was thin. Jobless claims continued to trend at a moderately low level. The trade deficit widened unexpectedly in November. As a result, net exports are likely to subtract from 4Q12 GDP growth.
With little economic data, the stock market began to focus on earnings reports. President Obama nominated Jack Lew to succeed Timothy Geithner as treasury secretary. The move likely signals an emphasis on upcoming battles. Lew currently serves as Obama’s chief of staff. He also ran the Office of Management and Budget for both Clinton and Obama.Next week, the economic data calendar heats up again. However, while there are a number of potentially market-moving data releases, the stock market will continued to monitor earnings reports. Retail sales are likely to have risen moderately in December, probably supported by the pulling forward of income (special dividends, early bonuses) into 2012 ahead of expected tax increases.
In November, factory output rebounded from the effects of Hurricane Sandy and we should see further gains in industrial production in December. The monthly inflation figures are expected to be benign. Lower gasoline prices will restrain the headline figures. Core inflation has been trending relatively low.
|Last||Last Week||YTD return %|
Consumer Money Rates
|Dollars per British Pound||1.616||1.548|
|Dollars per Euro||1.326||1.278|
|Japanese Yen per Dollar||88.200||76.820|
|Canadian Dollars per Dollar||0.985||1.017|
|Mexican Peso per Dollar||12.645||13.622|
|10-year municipal (TEY)||2.97||2.66|
Treasury Yield Curve – 01/11/2013
S&P Sector Performance (YTD) – 01/11/2013
|Producer Price Index (December)
Retail Sales (December)
Empire State Manufacturing Index (January)
Business Inventories (November)
|Consumer Price Index (December)
Industrial Production (December)
Homebuilder Sentiment (January)
Fed Beige Book
|Jobless Claims (week ending January 12th)
Building Permits, Housing Starts (December)
Philadelphia Fed Index
|Consumer Sentiment (mid-January)|
|MLK, Jr. Holiday (markets closed)|
|Existing Home Sales (December)|
|New Home Sales (December)|
|Real GDP (1Q13, advance estimate)
FOMC Policy Decision (no Bernanke press briefing)
US 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. US 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 US 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.
Tax Equiv Muni yields (TEY) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business January 10th, 2013.