Top Stories Last Week
• S&P 500 Index Rose the Seventh Week in a Row
U.S. stocks were slightly higher on the week. The economic news was mixed, giving investors a reason to take a break from buying spree. S&P 500 Index rose slightly by 0.2%, while MSCI EAFE index lost 0.2% and MSCI Emerging Market Index rose by 0.3%. Gold dropped by 3.9% and the GSCI commodity index lost 0.2%. The bond markets dropped for the week, Barclays US Treasury index declined 0.2% while US high yield bonds gained 0.5%.
• Obama Outlined His Priorities in the State of Union Address
In his State of the Union speech, President Obama proposed raising the minimum wage and taxes on the wealthy; spending $50 billion on an infrastructure job-creation plan; and passing a gun control law. He also called for a trade pact with European Union, immigration reform and revamping the tax code to remove loopholes.
• European Economy Slumped in the Fourth Quarter
The euro zone’s economy shrank last quarter at an annual rate of 2.3%, the fastest pace since the height of the world recession in early 2009, as worsening economies in Italy and other southern European countries infected the eurozone’s core economies of Germany and France. The drop in euro-zone gross domestic product suggested that Europe’s economic and financial crisis was far from over.
• G20 Finance Ministers Pledged No Currency War
Finance ministers and central bankers from the world’s 20 leading industrial and developing countries pledged not to target their exchange rates for competitive purposes. The two-day meeting in Moscow ended Saturday with a joint communiqué that included a promise that the G20 members would “refrain from competitive devaluation” and “resist all forms of protectionism and keep our markets open.”
• Retail Sales in the U.S Rose 0.1% in January
U.S. retail sales edged up slightly in January amid payroll tax increases for most Americans. The retail and food service sales rose 0.1% from December and totaled a seasonally adjusted $416.6 billion, slightly below market expectations. Retail sales climbed 4.4% when compared to January 2012. Excluding autos, building materials and gasoline, retail sales increased 0.2%.
• Bank of Japan Stood Pat In February
The Bank of Japan kept its monetary policy unchanged as expected and offered a more optimistic assessment of the economy, but expectations for more easing steps are likely to continue as the government prepares to install a new team that’s willing to undertake aggressive monetary measure. Prime Minister Shinzo Abe set to replace the BOJ’s governor and two deputy governors next month with those who are more dovish.
Top Stories to Watch This Week
• Sequester Looms
The automatic spending cuts, so-called Sequester, will take effect in March 1. About $85 billion could be taken away from the government’s budget if Congress cannot come to an agreement in the budget standoff. And that isn’t expected immediately, as Congress has this week off.
• US Inflation
US Consumer Price Index is expected to rise 0.2% in January and 1.8% YOY.
• Earnings Reports
HP, Dell and Walmart will report earnings.