Blog Post

Weekly Market Commentary – Battle Creek

Stocks declined this past week after several weeks of increases.  The decline was attributed to the fall in oil prices on the heels of sharp U.S. inventory gains and hawkish comments by FED officials pointing to a possible rate increase at the late April meeting.  My belief is that the recent rally in oil was premature and the likely outcome of the April 17th meeting of OPEC and non-OPEC producers will likely just cap production at January’s record high levels.  Commodity prices were generally lower for the week as the dollar rose.  Economic data for this week included:

  • The National Association of Realtors reported that existing home sales fell 7.1% in February from a month earlier. The drop was much larger than expectations.  A lack of inventory of homes for sale was cited as the main reason for the decline.
  • The Labor Department reported U.S. first time claims for unemployment were 265,000 in the prior week. Since the week before was revised down to 259,000 this represents an increase of 6,000 claims.  The four week moving average of claims rose 250 to 259,750.
  • The Energy Information Administration reported that crude oil inventories in the U.S. rose 9.4 million barrels in the prior week. At the same time gasoline stockpiles fell by 4.6 million barrels.
  • Baker Hughes reported that operating U.S. oil drilling rigs declined by 15 in the latest week to 372. At its peak in October 2014 there were 1609 active oil drilling rigs.
  • The Commerce Department reported
    • New homes increased 2.0% in February from January but were 6.1% lower than a year earlier. The median sales price of a new home rose 6.2% in February from January.
    • Durable goods orders fell a seasonally adjusted 2.8% in February. Keep in mind that durable goods orders can be very volatile from month to month.  January’s gain was revised down to a 4.2% gain.  Excluding the volatile defense and aircraft sectors durable goods orders fell 1.8% in February.  Reduced demand for drilling and mining equipment as well as weak overseas demand was cited as reasons for the drop.
    • The gross domestic product in the fourth quarter was revised up again, this time to a 1.4% annual pace, double the original estimate of 0.7%. Increased consumer spending on services was credited with the improvement despite the headwinds of energy, exports and financial volatility.
    • State personal income rose last year at 4.4%.

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Best Regards,

Loren C. Rex, CFP®, AIF®                                                                               Erik Smith

President                                                                                                               Partner

Generations Financial Planning & Wealth Management                           269-441-4143

77 E. Michigan Ave, Suite 140

Battle Creek, MI  49017

Tel  269-441-4090

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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.

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