Rover's Weekly Market Brief — 3/2/2018

Indices

DJIA: 24,538.10 (-3.05%)

NASDAQ: 7,258.00 (-1.08%)

S&P 500: 2,691.00 (-2.05%)

Commodities

Gold: 1,322.80 (-0.56%)

Copper: 312.30 (-2.79%)

Crude Oil: 61.41 (-3.37%)

Economy


Following two consecutive monthly increases, a $8.6 billion (-10.0%) drop in orders for transportation equipment was a major component in January’s $9.2 billion (-3.7%) overall drop in new durable goods orders, for the largest decline in orders since a -6.8% drop in July 2017. Increases in orders for computers (+6.4%), communications equipment (+6.6%), fabricated metal products (+0.5%), and motor vehicles (+0.1%) were offset by declines for defense aircraft (-45.6%), civilian aircraft (-28.4%), capital goods (-5.1%), electrical equipment/appliances (-0.8%), and machinery (-0.4%). Excluding defense, orders were down -2.7%, and excluding transportation orders were down -0.3%. On a yearly basis, orders were up 8.9%, with gains in all areas other than computers (-2.9%), defense aircraft (-35.0%), and defense capital goods (-7.2%)

Strong consumer spending caused more of an increase in imports and draw down in inventory builds than originally estimated, resulting in a -0.1% downward revision in the second estimate of 2017 Q4 GDP to 2.5% and widening the drop from the previous quarter’s 3.2% rate. The import and inventory updates were offset by residential fixed investments (+13.0%), consumer spending (+3.8%), exports (+7.1%), nonresidential fixed investments (+6.6%), and government spending (+2.9%). On a yearly basis, GDP increased 2.3% in 2017 compared to 1.5% in 2016.

Personal income increased +0.4% in January, with after tax disposable personal income (DPI) up +0.9%, and inflation adjusted real DPI up +0.6%. Personal consumption expenditure (PCE) growth slowed to +0.2%, down from the +0.4% and +0.7% increases in the preceding two months, as some of the income growth helped fuel a +0.7% bump in the savings rate to +3.2%, its highest rate since +3.5% in August. Inflation adjusted real PCE spending fell -0.1%, with a +$4.8 billion increase in service spending somewhat offsetting a -$24.6 billion drop in durable goods spending that was led by a drop in new car sales. PCE inflation was up +0.4% (+1.7% Y/Y), with core PCE, which strips out energy and food and is the Federal Reserve’s preferred inflation measure, up +0.3%, to an unchanged annual rate of +1.5%.

Upcoming Economic Reports:

Wednesday March 7 – International Trade

Friday March 9 – Employment Situation

Earnings Calendar:

 

Monday Tuesday Wednesday Thursday Friday
Toyota Motor
(TM)
HDFC Bank
(HDB)
Costco
Wholesale
(COST)
Kroger
(KR)
GEA Group
(GEAGY)
ams
(AMSSY)
Nintendo Co
(NTDOY)
SMC
(SMCAY)
Dell-VMWare
Tracking
(DVMT)
American
Woodmark
(AMWD)




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