It was a fairly light week, as far as economic data was concerned.<\/p>\n
Existing home sales<\/strong> increased in January by +4.3% to 4.57 million units, which was higher than forecast but was somewhat tempered by some adjustments to the December level, which muted the effect.\u00a0 The median sales price of existing homes was unchanged (based on seasonal adjustments) and the year-over-year change was still negative at -2%.\u00a0 The \u2018months supply\u2019 of homes\u2019 has declined to the lowest level since spring 2006, at around 6.1 months.\u00a0 This may be from a decrease in listings than a strong improvement in sales, however.<\/p>\n New home sales<\/strong> fell in January by -0.9% to a seasonally-adjusted rate of 321,000 after four straight months of gains.\u00a0 This was somewhat tempered by upward revisions in the fourth quarter of last year.\u00a0 Interestingly, in 2011, only 304,000 new homes were sold\u2014the fewest on record since data began in 1963.\u00a0 We\u2019ve mentioned this before, but this level is far below that needed to keep up with replacements and demographic needs (think 3 times the current amount).\u00a0 It seems to be more a matter of how long<\/em> we trail along at this lower level.<\/p>\n Initial Jobless Claims<\/strong> were flat on the Feb. 18 week at 351,000, but the more relevant four-week moving average fell further to 359,000 (the lowest it\u2019s been since March 2008).\u00a0 While some disputed the initial stickiness of the numbers early on as well the magnitude of normal labor force size adjustments, the labor market continues to improve on many levels.\u00a0 Continuing claims fell to 3.392 million (a drop of 52,000).<\/p>\n It may be a bit early to read too much into this, but there has been a historical precedent of upward pressure on rates and increased tendency toward monetary tightening when initial claims levels begin to fall below 350,000 consistently.\u00a0 Right now, we\u2019re right about the breakeven point, so stay tuned.\u00a0 But, if this improvement continues\u2014even at a moderate pace\u2014the \u20182014\u2019 target for Fed action may need to occur sooner, barring other factors.<\/p>\n Market Notes <\/em><\/strong><\/p>\n 1 Week (%)<\/strong><\/p>\n<\/td>\n YTD (%)<\/strong><\/p>\n<\/td>\n<\/tr>\n 0.30<\/p>\n<\/td>\n 6.76<\/p>\n<\/td>\n<\/tr>\n 0.37<\/p>\n<\/td>\n 8.96<\/p>\n<\/td>\n<\/tr>\n -0.19<\/p>\n<\/td>\n 11.76<\/p>\n<\/td>\n<\/tr>\n 1.70<\/p>\n<\/td>\n 11.68<\/p>\n<\/td>\n<\/tr>\n 0.48<\/p>\n<\/td>\n 16.50<\/p>\n<\/td>\n<\/tr>\n 0.21<\/p>\n<\/td>\n 0.69<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 3 Mo.<\/strong><\/p>\n<\/td>\n 2 Yr.<\/strong><\/p>\n<\/td>\n 5 Yr.<\/strong><\/p>\n<\/td>\n 10 Yr.<\/strong><\/p>\n<\/td>\n 30 Yr.<\/strong><\/p>\n<\/td>\n<\/tr>\n 0.02<\/p>\n<\/td>\n 0.25<\/p>\n<\/td>\n 0.83<\/p>\n<\/td>\n 1.89<\/p>\n<\/td>\n 2.89<\/p>\n<\/td>\n<\/tr>\n 0.09<\/p>\n<\/td>\n 0.29<\/p>\n<\/td>\n 0.88<\/p>\n<\/td>\n 2.01<\/p>\n<\/td>\n 3.16<\/p>\n<\/td>\n<\/tr>\n 0.10<\/p>\n<\/td>\n 0.31<\/p>\n<\/td>\n 0.89<\/p>\n<\/td>\n 1.98<\/p>\n<\/td>\n 3.10<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n U.S. stocks were up another percent on the week, as equity assets continue to experience the benefits of improved economic numbers in the U.S. and decrease of debt tensions overseas.\u00a0 From a sector standpoint, energy and technology were the best performing industries, while financials and consumer discretionary lagged.\u00a0 Large-caps outperformed small-caps.\u00a0 Developed market foreign stocks outperformed U.S. issues, mostly due to strong performance in France, Germany and several larger European nations.<\/p>\n As earnings season came to an end, the final tally of positive surprises ended up at 67%, which is down from 74% in Q3 and the four-quarter trailing average of 75%.\u00a0 Revenue results were similarly lower.\u00a0 All-in-all, this earnings season has been described as mediocre to decent\u2014as earnings growth has decelerated, but remained soundly positive.\u00a0 Macro issues have appeared to dominate so far in 2012.<\/p>\n U.S. bonds rose in price slightly for the week, while foreign bonds outperformed dramatically with a weaker dollar.<\/p>\n Commodities were the best performers of the week again as oil prices rose, as did a variety of industrial metals, silver and gold.\u00a0 Oil prices have continued to rise, to $108 for WTI and $124 for Brent crude, as have gasoline prices (which hit closer to home for most on a day-to-day basis).\u00a0 It is possible to blame some of this on foreign policy issues surrounding Iran, as well as seasonal refinery operations which have kept some supply from the downstream market.\u00a0 When we discussed oil price factors with the chief energy economist of a major global bank some time ago, he speculated that as much as one-third of the price of a barrel of oil is based on geopolitical conditions.<\/p>\n Oil prices will likely continue to be a point of discussion if they continue to rise\u2014as the shaky sentiment of the typical consumer is especially sensitive to potential pitfalls in the recovery even if the economy is on a stronger upward track.<\/p>\n Have a good week.<\/p>\n Karl Schroeder, RFC, CSA, CEP<\/p>\n Investment Advisor Representative<\/p>\n Schroeder Financial Services, Inc.<\/p>\n 480-895-0611<\/p>\n Sources:\u00a0 FocusPoint Solutions, Barclays Capital, Bloomberg, Deutsche Bank, Goldman Sachs, JPMorgan Asset Management, Morgan Stanley, MSCI, Morningstar, Northern Trust, Oppenheimer Funds, Payden & Rygel, PIMCO, Reuters, Standard & Poor\u2019s, U.S. Federal Reserve, Wells Capital Management, Yahoo!.\u00a0 Index performance is shown as total return, which includes dividends, with the exception of MSCI-EM, which is quoted as price return\/excluding dividends.\u00a0 Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.<\/p>\n The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness.\u00a0 All information and opinions expressed are subject to change without notice.\u00a0 Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.\u00a0 Schroeder Financial, Inc. is a registered investment advisor.<\/p>\n","protected":false},"excerpt":{"rendered":" It was a fairly light week, as far as economic data was concerned. Existing home sales increased in January by +4.3% to 4.57 million units, which was higher than forecast but was somewhat tempered by some adjustments to the December level, which muted the effect.\u00a0 The median sales price of existing homes was unchanged (basedRead more<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-749","post","type-post","status-publish","format-standard","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/posts\/749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/comments?post=749"}],"version-history":[{"count":2,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/posts\/749\/revisions"}],"predecessor-version":[{"id":751,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/posts\/749\/revisions\/751"}],"wp:attachment":[{"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/media?parent=749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/categories?post=749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/tags?post=749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n\n
\n Period ending 2\/24\/2012<\/strong><\/td>\n \n \n \n DJIA<\/td>\n \n \n \n S&P 500<\/td>\n \n \n \n Russell 2000<\/td>\n \n \n \n MSCI-EAFE<\/td>\n \n \n \n MSCI-EM<\/td>\n \n \n \n BarCap U.S. Aggregate<\/td>\n \n \n \n\n
\n U.S. Treasury Yields<\/strong><\/td>\n \n \n \n \n \n \n 12\/30\/2011<\/td>\n \n \n \n \n \n \n 2\/17\/2012<\/td>\n \n \n \n \n \n \n 2\/24\/2012<\/td>\n \n \n \n \n \n