Rover's Weekly Market Brief — 3/23/2018

Indices

DJIA: 23,533.20 (-5.67%)

NASDAQ: 6,993.00 (-6.54%)

S&P 500: 2,588.00 (-5.96%)

Commodities

Gold: 1,353.20 (+3.12%)

Copper: 302.00 (-2.82%)

Crude Oil: 65.96 (+5.81%)

Economy


Noting that job gains have been strong in recent months and that economic activity has been rising at a moderate pace, the Federal Reserve Open Market Committee (FOMC) voted unanimously to raise the prime interest rate 0.25% to 1.5% – 1.75%, despite that fact that yearly inflation remains below their 2% target rate. The FOMC also updated their near term economic projections to show increases in expected GDP for 2018 (+0.2% to 2.7%) and 2019 (+0.3% to 2.4%), with longer run GDP unchanged at 1.8%. The unemployment rate was expected to drop further, with projections for 2020 down -0.4% to 3.6% and eventual stabilizing at a new longer run rate of 4.5% (-0.1%). Core PCE inflation expectations were increased +0.1% to 2.1% in 2019 and 2020, but overall PCE inflation was projected to remain at 2.0% over the longer run. Based on these projections, the FOMC forecast rate increases to 2.1% in 2018, 2.9% (+0.2%) in 2019, and 3.4% (+0.3%) in 2020, stabilizing at 2.9% (+0.1%) in the longer run.

New home sales were revised significantly upward for January by 29,000 to a seasonally adjusted annual rate (SAAR) of 622,000, with February’s sales falling only slightly behind at 618,000, up +0.5% from February 2017. The median sales price was $326,800, up 9.7% Y/Y, and the supply of houses on the market rose from 5.8 months to 5.9 months. Home sales rose +19.4% in the Northeast (+6,000, SAAR) and +9.0% in the South (+28,000 SAAR), but fell -3.7% in the Midwest (-3,000 SAAR) and -17.6% in the West (-35,000 SAAR). Sales of homes that had not yet been started jumped +24.6%, while sales fell for homes under construction (-6.7%) and completed homes (-10.4%).

Durable goods orders jumped +3.1% for February, after January’s upwardly revised -3.5% drop. The increase was led by a +7.1% increase in orders for transportation equipment, with automobile orders up +1.6%, a +25.5% increase in nondefense aircraft orders (vs -27.9% drop in January), and a +37.7% increase for defense aircraft orders (vs -48.9% drop in January). Stripping out transportation, orders were up +1.2%, with increases for primary metals (+2.7%), electrical equipment and appliances (+2.6%), and machinery (+1.6%), while orders fell for computers and electronic products (-0.2%). On a yearly basis, overall orders were up 9.1%, orders excluding transportation were up 8.5%, and orders rose in all categories except computers (-7.0%), and communications equipment (-4.5%).

Upcoming Economic Reports:

Wednesday March 28 – GDP, 2017 Q4 Final Revision

Thursday March 29 – Personal Income and Outlays

Earnings Calendar:

 

Monday Tuesday Wednesday Thursday Friday
Red Hat
(RHT)
Merck
(MKGAF)
Tencent Holdings
(TCEHY)
Constellation
Brands
(STZ)
Bank of China
(BACHY)
Paychex
(PAYX)
Michelin
(MGDDY)
CK Hutchinson
Holdings
(CKHUY)
Science Applications
International
(SAIC)
Contura Energy
(CNTE)




Leave a Reply

Your email address will not be published. Required fields are marked *

We value your privacy and will not display or share your email address

This site uses Akismet to reduce spam. Learn how your comment data is processed.