Monday, February 1, 2016

Economic Journal - Monday, 2/1/2016

(As of 7:30 am PST)

Markets are giving back some of Friday’s gains as slumping oil prices and disappointing data out of China this weekend weighed down stocks. Oil is down this morning, with crude oil falling nearly 5% to just under $32 per barrel as concerns were raised over whether or not OPEC and non-OPEC members would follow through with projected production cuts. Adding to the downside pressure was news out of China this weekend that showed manufacturing activity contracting for the sixth consecutive month. The data sent the Shanghai index tumbling 1.8% Monday, with most Asian and European indexes following suit. Economic data on the home front is also uninspiring. The PCE index, one of the key inflation measures viewed by the Fed, fell 0.1% in December suggesting that inflationary pressure remains low. This should likely play into the Fed’s decision to delay raising interest rates at its March meeting. Consumer spending was flat in December while personal income rose slightly. Construction spending inched higher in December, while a key report on US manufacturing, the ISM index, showed the sector contracted for the fourth straight month. Later this afternoon, Federal Reserve Vice Chairman, Stanley Fischer is scheduled to speak at the Council on Foreign Relations. The markets will be paying close attention to any commentary Fischer gives on the Fed’s policy paths for the rest of the year.

No comments: