Major market indices had modest gains with the biggest gains in developed international stocks and the smallest gains in the Russell 2000 small cap index.

Treasury bond yields rose with the 30-year bond yield at 4.703% and the 10-Year note at 4.481%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.87%.  Crude oil fell to $70.71 a barrel and natural gas rose to $3.732 per MMBTUs.  The U.S. dollar index fell to 106.79 and gold fell to $2896.30 an ounce.

In economic reports this week:

• The Treasury Department reported that in January, there was $513BN in receipts and $642BN in outlays for a deficit of $129BN.  For the fiscal year beginning in October there was $1596BN in receipts and $2436BN of outlays for a deficit of $840BN.
• The Federal Reserve reported that industrial production rose 0.5% in January, following a 1% gain in December.
  • Manufacturing output declined 0.1 percent, held down by a 5.2 percent decrease in the index for motor vehicles and parts.
  • A rebound in aircraft manufacturing, following the end of the Boeing strike, caused 0.2% increase in the overall index.
  • Mining, including oil and gas production, fell 1.2%.
  • Utility production rose 7.2% due to cold weather.
• The Commerce Department reported:
  • The advanced estimate of seasonally adjusted retail sales fell 0.9% in January.  The biggest decrease was in automobiles.

• The Labor department reported:
  • The consumer price index rose to a seasonally adjusted 0.5% in January after rising 0.4% in December.  From a year ago the CPI has risen 3.0% up from 2.9% year over year last year.
    • Excluding volatile food and energy the CPI rose 0.4 percent in January.  Indexes that increased over the month include motor vehicle insurance, recreation, used cars and trucks, medical care, communication, and airline fares. The indexes for apparel, personal care, and household furnishings and operations were among the few major indexes that decreased in January.

              Source:  Department of Labor

• • The producer price index rose to a seasonally adjusted 0.4% in January and was up 3.5% from last January.
    • Excluding volatile food, energy and trade services, the PPI rose 0.3% in January and 3.4% year-over-year.
  • Seasonally adjusted first-time claims for unemployment were 213,000, a decrease of 7,000 from the previous week’s revised level.  
    • The 4-week moving average of claims, designed to smooth out volatility, was 216,000 an increase of 1000 from the previous week’s revised level.
    • For the full unemployment report go here:  https://www.dol.gov/ui/data.pdf .
• The EIA weekly oil report is here: Weekly Petroleum Status Report.  Also, the EIA reported in the prior week:
  • Field production of crude oil rose from 13.478MM BPD to 13.494MM BPD.
  • Natural gas storage fell 100BN cubic feet and was below its average level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs rose 1 to 481 and the number of natural gas rigs rose 1 to 101.
• Factset reported with 77% of S&P 500 companies reporting, the blended earnings increase from a year ago is 16.9%.

Please call us if you have any questions.

Loren Rex – Emeritus

Erik A Smith, AIF® – President & C.E.O.

These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).

Sources:

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

https://ir.eia.gov/ngs/ngs.html

https://www.freddiemac.com/pmms

https://www.wsj.com/market-data?mod=nav_top_subsection

https://bakerhughesrigcount.gcs-web.com/na-rig-count

https://www.census.gov/economic-indicators

https://www.bls.gov/news.release/pdf/cpi.pdf

https://www.bls.gov/news.release/ppi.nr0.htm

https://www.fiscal.treasury.gov/reports-statements/mts/current.html