It was a somewhat quiet \u2018in-between\u2019 week for economic news, as most of the focus was on markets and an upcoming earnings season.<\/p>\n
The Small Business Optimism Index<\/strong>, while not always in the news, became a catalyst for market activity early in the week, as it fell from 94.3 to 92.5 for March.<\/p>\n Import prices<\/strong> were higher than expected in March at +1.3% (although February\u2019s gain was revised down to a negative number)\u2014mostly due to oil and raw materials being priced higher.\u00a0 Other prices carried through and were higher as well, such as vehicles and vehicle parts and other finished consumer goods.\u00a0 The year-over-year increase was +3.4%, which ties into broader inflation readings.<\/p>\n The Fed Beige Book<\/strong>, a periodic report that provides data and anecdotes from the Fed\u2019s regional bank about current conditions reiterated the \u2018modest to moderate\u2019 growth description used in February.\u00a0 Retail spending has improved, though, as has hiring activity\u2014again, in keeping with recent publications from the last few months.\u00a0 Manufacturing in general is better, notably in high-tech equipment and vehicles.\u00a0 Building activity has increased in most areas, although it remains at very low levels; this description is in keeping with other construction reports.<\/p>\n Jobless claims<\/strong> ticked up to 380k for the April 7 week, and were revised up to 367k for the previous week\u2014all-in-all, this moved the more relevant four-week moving average up a bit, but has really been unchanged since late January.\u00a0 Continuing claims<\/strong>, however, declined by 98k as did the rolls from extended\/emergency programs, which is positive news.<\/p>\n Has a warmer-than-average winter helped matters?\u00a0 Probably.\u00a0 Warmer weather tends to affect construction most directly, as projects can begin earlier in the year, and also, more indirectly, provides a more favorable \u2018climate\u2019 for consumer activity (since they aren\u2019t stuck behind snow drifts, they\u2019re able to shop more\u2014simplistic but somewhat accurate).\u00a0 So, our numbers in early 2012 were a better than expected to some degree, and some minor deceleration now isn\u2019t too surprising.<\/p>\n The U.S. Consumer Price Index (CPI)<\/strong> gained +0.29% for the month of March, a number that was largely in line with expectations, while the core CPI number was up +0.23% (slightly higher than forecast).\u00a0 Year-over-year, this translates to a +2.7% gain on the headline and +2.3% on the core.\u00a0 Food and energy prices continue provide volatility, but the more extreme moves in the latter (mostly due to gasoline price contributions to the index) have decelerated from February\u2014which may provide some relief from concerns high energy prices could derail the progress we\u2019ve made in economic growth.\u00a0 Core prices have shown some signs of increase across the board\u2014from used cars to clothing\u2014so this bears watching.\u00a0 The PPI number for March was up +0.14%, which was about half of what was forecast, and core PPI gained +0.3%, which was in line with expectations.<\/p>\n The Univ. of Michigan Consumer household sentiment index<\/strong> didn\u2019t change much for April, and was a bit lower than expected at 75.7.\u00a0 Readings for current conditions fell a bit, while future expectations improved.\u00a0 The long-term inflation expectation is 3.0% (which is about where it is now… often the most common guess of future figures is based on a bias of where we stand now).<\/p>\n We made a point of showing a historical chart of these sentiment numbers during last week\u2019s advisor webinar, mostly for the purpose of demonstrating that consumer feelings generally have an inverse relationship to longer-term market performance.\u00a0 When clients don\u2019t feel especially good about the economy (as they haven\u2019t for the past several years), they certainly don\u2019t feel like placing money into risk assets like stocks.\u00a0 However, when they finally do get to the point where exuberance takes over (often after everyone else has made their money in the \u2018market,\u2019) it is often too late.\u00a0 We\u2019re far from that point, though, on a behavioral level.<\/p>\n Market Notes <\/em><\/strong><\/p>\n 1 Week (%)<\/strong><\/p>\n<\/td>\n YTD (%)<\/strong><\/p>\n<\/td>\n<\/tr>\n -1.61<\/p>\n<\/td>\n 5.95<\/p>\n<\/td>\n<\/tr>\n -1.97<\/p>\n<\/td>\n 9.63<\/p>\n<\/td>\n<\/tr>\n -2.66<\/p>\n<\/td>\n 7.88<\/p>\n<\/td>\n<\/tr>\n -1.15<\/p>\n<\/td>\n 6.32<\/p>\n<\/td>\n<\/tr>\n -0.98<\/p>\n<\/td>\n 12.02<\/p>\n<\/td>\n<\/tr>\n 0.25<\/p>\n<\/td>\n 1.11<\/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 0.07<\/p>\n<\/td>\n 0.32<\/p>\n<\/td>\n 0.89<\/p>\n<\/td>\n 2.07<\/p>\n<\/td>\n 3.21<\/p>\n<\/td>\n<\/tr>\n 0.08<\/p>\n<\/td>\n 0.27<\/p>\n<\/td>\n 0.86<\/p>\n<\/td>\n 2.02<\/p>\n<\/td>\n 3.14<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Markets experienced some of the best and worst days of the year last week, the second negative result in a row, as markets digested mixed employment numbers, worried once again about European debt and prepared for a likely interesting earnings season for Q1.\u00a0 Overall, stocks were down although U.S. equities outperformed developed markets and large-caps continue to dominate small-caps this year.<\/p>\n In the U.S., materials and consumer discretionary stocks led with more tempered losses, while financials and energy lagged by the largest amounts.\u00a0 From an early earnings standpoint, Alcoa, Google and JPMorgan beat estimates.\u00a0 We expect another interesting earnings season, with quite a few large members of the S&P reporting this coming week.<\/p>\n Emerging markets ended up with the best relative performance, however, led by China and other nearby Asian stocks.\u00a0 China published macro data for March which showed that while Q1 GDP grew less than expected (at 8.1% versus 8.3% anticipated), industrial production and other measures rose, which helped alleviate some \u2018soft landing\u2019 concerns.<\/p>\n With risk assets pulling back and lower rates, bonds outperformed on the week.\u00a0 Foreign developed and emerging market debt outperformed U.S. debt.<\/p>\n In commodities, gold had a decent week considering the risk-off environment, while oil was down a few dollars.<\/p>\n Have a good week.<\/p>\n Karl Schroeder, RFC, CSA, AACEP<\/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, Schroder\u2019s, 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 Services, Inc. is a registered investment advisor.<\/p>\n","protected":false},"excerpt":{"rendered":" It was a somewhat quiet \u2018in-between\u2019 week for economic news, as most of the focus was on markets and an upcoming earnings season. The Small Business Optimism Index, while not always in the news, became a catalyst for market activity early in the week, as it fell from 94.3 to 92.5 for March. Import pricesRead 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-765","post","type-post","status-publish","format-standard","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/posts\/765","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=765"}],"version-history":[{"count":3,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/posts\/765\/revisions"}],"predecessor-version":[{"id":769,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/posts\/765\/revisions\/769"}],"wp:attachment":[{"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/media?parent=765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/categories?post=765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dev.sunlakesofarizona.com\/blog\/wp-json\/wp\/v2\/tags?post=765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n\n
\n Period ending 4\/13\/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\/31\/2011<\/td>\n \n \n \n \n \n \n 4\/6\/2012<\/td>\n \n \n \n \n \n \n 4\/13\/2012<\/td>\n \n \n \n \n \n