Economic Journal - Friday, 6/17/2016

(as of 7:10 AM PST)

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Economic Journal - Wednesday, 6/15/2016

(as of 7:25 AM PST)

On the day that the Federal Open Market Committee concludes its two-day policy meeting, the markets are looking for reasons to push into positive territory and avoid a fourth consecutive session in the red. Most experts believe that because of May’s poor employment report and the concern over the upcoming Brexit vote that the FOMC will keep the fed funds rate unchanged. Investors will be very interested in what Fed Chairwoman Janet Yellen says about what the Fed will due in July and the balance of the year. The Brexit vote continues to dominate investor sentiment around the world and polling yesterday swung back to the “Remain” camp. This has pushed all of the European markets into the green. That vote takes place on June 23rd. Asia has pushed into positive territory as well. It has been a busy day of economic reporting and the data has been mixed. The weekly mortgage applications data showed a decline in applications while the Producer Price Index and Empire Manufacturing Survey were both stronger than expected. A report on crude inventories is due out later today which will more than likely impact oil which has fallen below the $50 per barrel level.

Economic Journal - Tuesday, 6/14/2016

(as of 6:45 AM PST)

It's a bit of a minefield for investors as they weigh global and economic events this morning. While the effects of the tragic terror attack in Orlando wane and thoughts of a Federal Reserve interest rate hike diminish, attention now shifts to the very likely prospect that British voters will vote to exit the European Union.  Several polls show that the vote to exit is solidly in the lead in a vote to be held on June 23rd.  A vote for a British exit or 'Brexit' as the event has become known would signal a shift from global cooperation to nationalism, a concept that is also being pushed by the 'Trump for President' agenda.  Despite the stream of concerns, the US economy continues to provide a strong positive force to the global economy with unemployment at very low levels and longer term corporate growth projections (4th quarter of 2016) looking very strong.  US markets continue to lag in what might be the fourth consecutive day of declines.  Oil is on the decline again, but worries about a supply glut are on the decline, with projected demand numbers increasing and turmoil inside of Nigeria putting a dent is global supplies.  Precious metals continue their upward trend with the price of gold approaching $1300 per ounce.  Don't be surprised to see markets turn to the upside as the day wears on as oil prices react positively to a recent uptick in the demand for oil and energy stocks lead the way.

Economic Journal - Monday, 6/13/2016

(As of 7:25am, PST)

After a weekend where we watched yet another horrific mass shooting take place in Orlando, investors are cautious this morning ahead of two key market moving events that will take place in the next couple of weeks. In early trading, the Dow is down 21 points and the S&P500 is nearly at breakeven. The big news this week is highlighted on Tuesday and Wednesday with central-bank meetings in the U.S. and Japan. Most experts expect that the Federal Reserve will leave interest rates unchanged due to recent weakness in several economic reports, however there will be interest in the Fed’s outlook for the balance of the year. The other event that investors are eyeing with great interest is in Europe where U.K. voters will decide if they will leave the European Union. Polling activity has grabbed a lot of attention as it continues to show uncertainty of the result. There isn’t any economic data out today but there has been some news on the corporate front. Microsoft announced that it will acquire LinkedIn in an all-cash deal valued at $26.2 billion. LinkedIn is currently trading up nearly 50% while Microsoft is down over 3%. Oil is has fallen below $50 per barrel while gold is up in the early going.

Economic Journal - Monday, 6/6/2016

( as of 7:00 AM PST)

Friday's bad jobs report is a distant memory and investors are once again bidding up stock prices to open the trading week.  It seems that the positive momentum is a result of the fact that an interest rate increase is off the table for this month.  Oil is up on supply worries due to supply line disruptions in Nigeria. Europe and Asia were mixed with little conviction on the buy or sell side.  Precious metals are up slightly in early trading. Markets are showing amazing resilience in light of negative data and a bearish bias by many analysts and investors.  

Economic Journal - Friday, 6/3/2016

(as of 7:10 AM PST)

Today's shocking jobs report sent the Dow down by triple digits and other indices are following.  New jobs created was a meager 38,000 while analysts had projected 160,000.  In addition, prior month projections for both April and May were revised downward significantly, indicating that the US recovery was not near as vibrant as previously thought.  Other woeful economic data included a decline in the ISM services number, although the reading did not show a slippage into contractionary territory, and an increase in the balance of payments deficit.  Most investment sectors are reacting to the overall dismal numbers.  The US dollar is falling heavily on currency markets, interest rate yields are falling while commodities are generally up across the board, with gold and silver sporting gains of over 2%, breaking their down cycle that we have seen over the past few weeks.  One positive nugget that investors might see in the weakness is that the Federal Reserve is much less likely to raise interest rates this month in light of the economic weakness.  But it will not likely stem the downward tide that we are seeing at the beginning of what could be a long day for market bulls.  

Economic Journal - Thursday, 6/2/2016

(As of 7:05am, PST)

It looks like we may be back to the trend of where oil goes, so go the markets. The markets are all down this morning following a slide in oil prices. All of this after a volatile day yesterday which saw the Dow slipping to a triple digit loss in the early going and closing the day slightly in the green. The oil slide today is due to an announcement by OPEC that there will be no change in crude output. Consequently, energy stocks are taking a beating in the early going. Investors will continue to have their eyes focused on oil as OPEC continues meeting through the rest of the week. The labor market continues to look strong with the ADP Employment Change report showing an increase in private sector jobs close to expectations and a revised number for April that was better than expected. Unemployment continues to improve and marked its 65^th straight week where initial claims have been below 300,000. These healthy labor reports are all in line with the Fed targets and point to interest rate increases as the year rolls on. All eyes will be on the nonfarm payroll reports which are due out Friday. In news around the world, the ECB left its key lending rates unchanged as expected. All of the European indices are in the red at the moment while results in Asia are mixed. 

Economic Journal - Wednesday, 6/1/2016

(As of 7:25am, PST)

The markets have welcomed June in with a thud. In the early going the Dow is down 75 points and the S&P500 if off nearly a half a percent. On Tuesday, the S&P500 fell 7 points with eight of the ten sectors trading lower. This is a big week of economic data reporting and investors are taking a cautious approach as the news rolls out. Most of the data here in the U.S. has been positive and has pointed to a stronger economy in the second quarter. The downside to positive news is that it points toward potential rate hikes later this year by the Federal Reserve and investors are trying to decide if that is a good thing. Fresh economic news out this morning is the ISM manufacturing index which reported an increase in May.  The ISM index is formulated from a survey of purchasing managers and is helpful in giving insight on the health of the nation’s manufacturing activity. Auto and Truck sales for the month of May will be reported later in the day. The big news this week will be on Friday when the U.S. jobs report rolls out. Oil is trading lower today ahead of an OPEC meeting on Thursday. The news wasn’t much better overseas with most indices in Europe and Asian trading in the red.

Economic Journal - Tuesday, 5/31/2016

(as of 7:10 AM PST)

Conflicting economic data this morning has investors befuddled and markets split.  Consumer spending is the bright spot with its 1% increase the largest since 2009.  Inflation is showing signs of life, creeping up to .3%, which is actually perceived to be a good thing by most economists.  On the down side of the news was consumer confidence, which dropped to its lowest point since December of last year, and the Chicago PMI, a key measure of industrial activity in the Midwest, which slipped into contractionary territory.  In international news, Asian markets have registered solid gains overnight while Europe is mostly down, but mildly so.  Testimony by Janet Yellen, Federal Reserve Chair, seems to indicate that another interest rate increase is coming sooner than later and that perception is likely suppressing any response from the positive side of the data.  Gold continues to slump while oil is finding support around the $50 per barrel mark.  Expect the threat of higher interest rates to keep markets depressed as the week progresses.

Economic Journal - Friday, 5/27/2016

(as of 7:00 AM PST)

Markets are holding steady this morning after a week that has been a pleasant surprise for investors.  It seems that early in the week investor sentiment was so negative and short sellers were so exposed, that a surprise rally sent bear market strategists running for cover, trying to avoid excessive losses.  With short sellers adding to buying pressure stocks continued their upward trajectory with indexes up almost 2% going into Friday's closing session.  There has been a definite shift in expectations from the Federal Reserve in that an interest rate hike seems much more likely in June based upon positive economic data on the US economy.  But markets have shrugged off interest rate fears putting much more emphasis on signs of a robust economic recovery in the US.  The dollar is continuing to rally against most foreign currencies which is putting downward pressure on oil prices and precious metals.  After rallying to over $50 per barrel this week, oil is giving back some gains today.  Gold has been a victim of a strengthening US dollar, giving back a good chunk of its strong year to date gains.  International markets have been pretty quiet, seeming to be in a consolidation mode, after following the US markets higher this week.

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Economic Journal - Thursday, 5/26/2016

(as of 7:20 am, PST)

Stocks seem to be cooling off after a two day run that saw the Dow post gains of 359 points and the S&P500 notching its highest close since April 27. Sellers seem to be dominating the early trading today as all of the major indices have opened in the red.  There has been some good economic news out the last couple of days that could keep the rally going as the day goes on. Orders for durable goods rose in April led by a higher demand for new cars, trucks and commercial jets and the labor market continues to be strong as a report on weekly jobless claims fell to a one-month low. There was a drop in business spending that may be a cause for concern suggesting that the manufacturing sector may not be as robust as analysts would like to see. Oil continues to be a market driver during this rally as it topped $50 per barrel for the first time in six months. The gains yesterday and today are being fueled by a report released by the U.S. Department of Energy on Wednesday which showed a 4.2 million barrel reduction in oil inventories. Experts had expected a drop but nothing near that level. Investors are still digesting the last of the earnings reports and the results today have been mixed from companies like HP, Inc. and Costco. Asia has continued to follow the lead of the U.S. markets with most indices trading in the green overnight with the European indices mixed. 

Economic Journal - Wednesday, 5/25/2016

(as of 7:10 AM PST)

After marking the best single session showing in nearly three months, can the equity markets avoid the recent trend of giving it all back the next day? So far it looks favorable that the trend might shift as both the Dow and S&P500 are showing impressive gains in early trading. Yesterday ended with the Dow up 1.2% and the S&P500 up 1.4%. Investors seem to be viewing the potential of an interest rate hike by the Fed in June is an indication of a strong U.S. economy. Other factors that may be fueling this surge are oil prices. Oil is approaching $50 per barrel on news from an industry group that reported a larger decline in inventories than expected. More oil data is due out at 7:30 PST when the Energy Information Administration reports on petroleum inventories. Investors seem to be shrugging off a report that revealed the nation’s trade deficit widened in April as imports increased faster than exports. The recent shift toward equities has weighed heavy on gold and the dollar. Both are lower today in early trading. In news around the world, most Asian markets closed higher and European stocks are advancing. 

Economic Journal - Tuesday, 5/24/2016

(as of 7:20 AM PST)

Buyers have returned to US markets in a big way, sending shares up 1% to start the day.  Bellweather tech giant Microsoft is leading the way with positive results from its new software marketing plan.  Even more surprising is the fact that investors are ignoring strong hints of a June interest rate hike.  It has been a long time since we have seen stock prices decouple from interest rate fears like we are seeing today.  New home sales came in very strong and well above expectations, adding to investors enthusiasm.  Asia markets were mixed overnight while Europe is also up big in late trading.  Precious metals are off while oil is slightly to the upside.  Investors seem to think that an aggressive Federal Reserve interest rate hike is an indication that the US economy is much stronger than previous data has portrayed.

Economic Journal - Monday, 5/23/2016

(As of 7:15 am PST)

Comments from two voting members of the Fed this morning have markets backpedaling from their Friday highs. Boston Fed President Rosengren and St. Louis Fed President Bullard separately made statements that left the door open for a June rate hike. As we’ve witnessed throughout the entire month of May, the market seems set to trade in a range bound pattern with little conviction on the part of buyers or sellers to drive pressure in either direction. With earnings season winding down, we’re likely to remain in this pattern for the next couple of weeks with investors highly focused on Fed remarks and US economic data that could influence June’s rate decision. Speaking of data, the calendar is empty today with a report on new home sales set to be released tomorrow. Oil prices are slumping today, down over 1% to $47.90 per barrel on oversupply worries. Gold prices are down while the US dollar index is inching higher. In overseas action, Asian markets finished the day mixed while Europe is heading towards a negative close.

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Economic Journal - Friday, 5/20/2016

(As of 7:20 am PST)

Stocks are turning around Friday as mid-week selling pressure looks to have momentarily subsided. Fears of a June interest rate hike, which had markets in a tizzy earlier in the week, are being shrugged off Friday as market strategists re-evaluated several macro risks that may impact the Fed’s path forward on raising rates. The U.K. referendum in June and the US election this fall are two events being referenced that may put the brakes on the Fed’s interest rate increases. Whatever the case, we may also be seeing a relief trade Friday, as some commentators are looking at how well the market held up this week despite the renewed hawkishness from the Fed. Today is an options expiration day, also known as ‘quadruple witching’ which opens the door for some intraday swings on elevated volume and volatility. If the market holds on to these early session gains we’d be looking at a 0.3% weekly gain for the S&P500, remarkable considering the selling pressure earlier in the week. In overseas action today, most of the broad indexes are higher. Gold and oil are lower today while the US dollar and 10 yr. treasury yield ticked higher. 

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Economic Journal - Thursday, 5/19/2016

(As of 7:20 am PST)

It’s been a busy couple of days on the economic news front and investors are trying to sort out the implications. Yesterday, the markets reacted negatively to the release of the Federal Open Market Committee minutes from their last meeting. The minutes hinted that policy makers are ready to normalize rates as early as June. This news erased some early session gains yesterday and both the Dow and S&P500 closed mostly flat for the day. Also weighing on stocks is a drop in oil prices which fell due to a stronger dollar and an unexpected increase in U.S. crude inventories. On the positive side of the news front, the labor market still looks strong as the number of Americans who applied for unemployment benefits in mid-May fell by 16,000 to 278,000. Worth noting on the earnings calendar are reports from Walmart and Cisco. Walmart is currently up over 8.5% after beating forecasts and Cisco was a big winner with their upbeat report. European stocks are lower today amid news of an EgyptAir plane vanishing from the radar and Asian stocks were mostly in the red overnight.

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Economic Journal - Wednesday, 5/18/2016

(As of 7:15 am PST)

After an impressive gain by the major indices on Monday, the markets yesterday gave most of those gains back. Today is off to a rocky start as investors are bracing for a release from the Federal Reserve later this morning of minutes from their April meeting which may hint of a rate hike in June. Several Fed officials spoke yesterday and provided enough concern to keep investors cautious.  Recent positive economic news has been pointing toward the Fed being more hawkish toward raising rates in June. June seems to be a focal point for investors as another key event will be the OPEC meeting which will more than likely set the direction for future price movements of oil. Earnings season is winding down and results this week have been overshadowed largely by the narrative surrounding the Fed’s interest rate path. Today’s reports came from Target and Lowe’s with results that were mixed. On the international front, Europe struggled after news showed that the Eurozone may be slipping into deflation and Asia was mostly in the red.

Don't forget to check out the home of our new blog at www.millerfinancial.biz for daily financial updates!

Economic Journal - Tuesday, 5/17/2016

(As of 7:15 am PST)

Markets are giving back some of yesterday’s gains after economic data on inflation and the housing market recovery caused some market participants to begin fretting over a Fed rate increase. Consumer prices jumped in April to their highest level in more than three years stirring up debate today about the Fed’s path towards its next rate increase. Reports on the housing market were also positive. Housing starts rose in April more than expected, while building permits (a sign of future demand) also ticked higher indicating the housing market remains strong. Oil prices have cooled a bit after surging yesterday but continue to trade over $47 per barrel. Apple Inc. is also trading flat today after rallying over 3% yesterday on news that Warren Buffet’s Berkshire Hathaway purchased 9.8 million shares in the first quarter. The stock, which has struggled of late, helped lead a tech rally that sent the Nasdaq and the other major benchmarks soaring yesterday. It’s a quiet news day on the international scene. Asian markets finished the day mostly higher while European stocks look set to close with modest losses. Precious metals are up while the dollar index is down slightly.

Don't forget to check out the home of our new blog at www.millerfinancial.biz for daily financial updates!

Economic Journal - Monday, 5/16/2016

(As of 7:05 am, PST)

In the early going on this Monday morning, the markets are shrugging off disappointing economic news here at home and around the world and are trying to kick off this new week with some positive results. Currently, the Dow is up 57 points and the S&P500 is trying to avoid a fourth consecutive losing session trading up 6.5 points. The bad news in the U.S. came from the Empire State general business-conditions index which revealed a sharp decline from this month to last month. In April, the reading was a positive 9.6 and this month came in at -9. This weak showing lends itself to the Fed staying put on raising rates next month. In China, the economic news continues to disappoint. China’s industrial production and investment readings came in below expectations for April. This news seemed to weigh heavier on the European markets as they were mostly in the negative overnight while the Asian markets are mostly positive. Oil is experiencing a rally this morning after Goldman Sachs reported that the oversupplied market has likely switched to a deficit. All of this news seems to be a backdrop for investors with the main focus coming later in the week when the minutes from the Federal Reserve’s April policy meeting will be released. There are no noteworthy earnings reports this week. All eyes continue to be on market driver Apple whose shares rose sharply this morning after an announcement that Warren Buffet’s Berkshire Hathaway invested 9.8 million shares during the first quarter. This shot in the arm for the largest market cap company may translate to a shot in the arm for the rest of the markets.

Economic Journal - Friday, 5/13/2016

(As of 7:15 am PST)

It’s been a back and forth week for US markets this week. Entering Friday’s session, the S&P500 is up 0.3% for the week, while the Dow is down 0.1% and the Nasdaq is flat. We had some big moves mid-week as the Dow scored its biggest percentage gain in two months Tuesday, only to have those gains erased Wednesday as downside pressure crept back in. Yesterday’s session bounced all around ultimately to finish flat on the day. Today we’re seeing a similar pattern emerge. Markets are bouncing around the unchanged line despite some surprisingly positive economic data which may ultimately propel stocks to the upside later in the day. April retail sales increased 1.3% month-over-month marking the biggest gain in over a year. The gains were fueled by a 3.2% increase in auto sales and a 2.2% in gas station sales, with gains also seen throughout most of the sector. A strong retail sales report will translate into improved Q2 GDP forecasts, a positive for the market on the whole. Reports on the Producer price index showed prices were up a meager 0.2% in April, indicating inflation remains subdued. Lastly on the data front, consumer sentiment soared as the latest reading from the University of Michigan’s index moved 7.6% in May hitting its highest level in nearly a year. In other news, oil is being weighed down today on comments by Russia’s energy minister that indicated the oil market has a long ways to go before balancing out. Crude prices were down over 1% to $46 per barrel early Friday. International markets are mixed today with most of Asia limping into the weekend with losses while European stocks turned to the upside in their final hour of trading with positive gains across the board. In summary, the market appears content to hover near these current levels in a tight range trade for the foreseeable future. With earnings season winding down, and some big market moving events on the horizon (OPEC meeting and FOMC meeting in June) there’s not much conviction to propel things higher at this point. 

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