Top Stories Last Week
• S&P 500 Index Hit a Record High
During a shortened trading week, the S&P 500 Index, which is probably the most closely followed, broad index of US equities hit a record. Eclipsing a five-year-old high by four points, the S&P 500 (SPX) closed on Thursday at 1569.19. The S&P index rose by 0.7% for the week while MSCI EAFE index declined 0.6%. The MSCI Emerging Market Index climbed 1.3%. Gold price was down by 0.7%. The SPGC commodity index gained 1.5%. The bond markets rose as well. Barclays US Treasury index rose 0.4% and US high yield bonds was flat.
• Cyprus to Stay in the Euro Zone
Cyprus reached agreement with the IMF and European Union Cyprus on a 10 billion euros bailout. The tax on insured bank deposits was ditched. Instead, Cyprus agreed to wind down Laiki, its second largest bank. It was also agreed on a deep haircut on deposits over 100,000 euros (129,000 U.S. dollars) in the largest bank. President Nicos Anastasiades said on Friday that the eastern Mediterranean island will stay within the eurozone.
• US Durable Goods Orders Surged 5.7% in February
The US February durable goods orders increased 5.7%, shrugging off some economists’ expectations of a meager gain of 3.8%. This push upwards signals somewhat higher demand. Durable goods orders were positive in part due to a 21.7% increase in transportation equipment. This in turn was partially owed to American Airlines placing a 143 lot order with Boeing. Automobile orders moved up 3.8% while defense aircraft orders increased by 7.6%.
• US Home Price Rose by 8.1% YOY
Case-Shiller data for January showed the 10-city composite jumped 7.3% YOY, while the 20-city index surged 8.1%, its fastest levels since before the housing collapse. On a yearly basis, all cities posted gains while 19 of the 20 showed acceleration. Detroit slowed down but still posted double-digit increases. With the Fed firmly in support the housing market continues to show signs of substantial improvement. The S&P/Case-Shiller indexes rose at its fastest rate since the summer of 2006.
• Tensions Escalated in Korea Peninsula
Tensions between North Korean and US and South Korea have escalated since North Korea detonated a nuclear device in February, denounced tightened United Nations sanctions and threatened pre-emptive nuclear strikes in response to U.S.- South Korea military drills. The U.S. said it takes North Korean threats seriously while denouncing the “long-history of bellicose rhetoric.” The North Korean leader Kim Jong Un called nuclear weapons development one of North Korea’s top priorities as his country declared a state of war with South Korea and reiterated threats to attack the U.S..
Top Stories to Watch This Week
• US ISM
The Institute of Supply Management survey will be released on Monday. Little change is expected. The US manufacturing activities will continue to grow, according to economists.
• US Job Reports
The Labor Department will report nonfarm payrolls on Friday. Median forecast calls for 190K increase in March.
• BOE and BOJ meetings
Bank of England and Bank of Japan will hold policy meetings. It will be interesting to see how Japanese monetary policy will change under a new governor.