Clarksville, TN – Stock market participants seemed only mildly concerned about escalating tensions in Ukraine, but were encouraged by comments from Fed Chair Janet Yellen. Yellen suggest that the Fed would respond to significant, surprising changes in the outlook for growth, inflation expectations, or financial conditions.
Short-term interest rates aren’t going to be raised for a while, but the first increase in rates could be pushed out if the Fed remains short of its goals (full employment, 2% inflation).
The economic data were mixed, but suggested some recovery from adverse weather. Retail sales were stronger than expected in March, but core sales for the quarter were unchanged from 4Q13.
Industrial production rose more than expected, but that partly reflecting a continuation of below normal temperatures. Indeed, while industrial production rose at a 4.4% annual rate in 1Q14, most of that was in mining (a 9.5% annual rate) and utilities (a 17.9% pace).
Manufacturing output rose at a 1.7% annual rate in 1Q14, but is poised for a sharper rise in 2Q14. The Consumer Price Index rose a little more than expected in March, reflecting a 0.3% increase in shelter costs. Residential construction figures were mixed, but a bit disappointing.
Next week, financial market participants could react to any surprises in a number of data releases, but none of the reports will alter the overall economic picture. In contrast, April figures will begin arriving in the following week. The ISM Manufacturing Index and the Employment Report will help set near-term expectations for the economy.
|Last||Last Week||YTD return %|
Consumer Money Rates
|Dollars per British Pound||1.679||1.531|
|Dollars per Euro||1.384||1.310|
|Japanese Yen per Dollar||102.260||97.830|
|Canadian Dollars per Dollar||1.100||1.023|
|Mexican Peso per Dollar||13.059||12.210|
|10-year municipal (TEY)||4.31||4.38|
Treasury Yield Curve – 4/17/2014
S&P Sector Performance (YTD) – 4/17/2014
|April 21st||—||Leading Economic Indicators (March)|
|April 22nd||—||Existing Home Sales (March)|
|April 23rd||—||New Home Sales (March)|
|April 24th||—||Jobless Claims (week ending April 19th)
Durable Goods Orders (March)
|April 29th||—||Consumer Confidence (April)|
|April 30th||—||Real GDP (1Q14, advance estimate)
FOMC Policy Decision (no press conference)
|May 1st||—||ISM Manufacturing Index (April)|
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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 April 16th, 2013.