Julex Market Weekly 03-09-2014 | US Stocks Moved Higher Last Week

Top Stories Last Week

• US Stocks Moved Higher Last Week

US stocks moved higher while bonds declined as employers added more jobs than expected. Last week, S&P index rallied 1.1%, and MSCI EAFE index climbed 0.2%. The MSCI Emerging Market was flat. Gold climbed 1.2%, and the SPGC commodity index rose by 0.5%. The bond markets dropped as rates were higher. Barclays US Treasury index was lower by 1.1%, while US high yield bonds dropped by 0.4%.

• US Added 175K Jobs

After two months of huge disappointment, the stronger-than-expected February jobs report now pretty much guarantees that the Federal Reserve will maintain the pace of tapering at its March 18-19 meeting. Employers added 175K jobs in February, even as the inclement weather kept millions of Americans from getting to work. Data from the previous two months were revised higher. Employers added 129K jobs in January, up from 113K, and 84K jobs in December, up from 75K. The jobless rate in February climbed 0.1% to 6.7%, slightly higher than the 6.6 percent economists expected, while the labor force participation rate remained the same at 63%.

• US Manufacturing Activities Rebounded

U.S. manufacturing growth rebounded off an eight-month low in February, helped by a recovery in new orders, an industry report showed on Monday. The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.2 in February, up from January’s read of 51.3, which was the weakest reading since May 2013. There were some cautionary notes, as the production subindex sank to 48.2 from 54.8, notching its third straight month of declines and falling below 50 for the first time since August 2012. The employment index held flat at 52.3.

• China Manufacturing Slowed Further

Activity in China’s factory sector slowed to an 8-month low in February, a government survey showed, reinforcing signs of a modest slowdown in the economy as demand weakens. The official Purchasing Managers’ Index edged down to 50.2 in February from January’s 50.5, the National Bureau of Statistics said on Saturday, just ahead of market expectations of 50.1. The new orders sub-index in the official PMI China fell to a 8-month low of 50.5 in February from 50.9 in January and the sub-index for export orders fell to 48.2 last month, also a 8-month low, from 49.3 in January.

• Both ECB and BOE Kept Monetary Policies Unchanged

European Central Bank left its key interest rate at 0.25%. Mario Draghi offered a spirited defense of the wisdom of doing nothing Thursday. That was after he and his fellow policy makers dashed expectations for an interest-rate cut or other action to stimulate the still ailing euro zone economy. During his news conference after the bank’s monthly monetary policy meeting, Mr. Draghi described the euro zone as an “island of stability,” gave a slightly more upbeat view of the region’s growth, and delivered a lengthy discourse on all the reasons to believe that Europe was not in danger of falling into the same deflationary rut as Japan.

The Bank of England (BoE) on Thursday voted to keep its main interest rate at 0.50 per cent, five years after deciding to cut borrowing costs to the current record-low level. Policymakers agreed by majority also to maintain the level of central bank stimulus pumping around the British economy at £375 billion (US$627 billion, 456 billion euros), the BoE said in a statement following a regular monthly meeting.

Top Stories to Watch This Week

• US Retail Sales

US Retail Sales are likely to rise 0.2% in February.

• US Consumer Confidence

Reuter/Michigan Consumer Sentiment Index is expected to improve to 81.9 from 81.6 in February.

• Bank of Japan Monetary Policy

BOJ will hold monetary policy meeting this week to decide on monetary policy.

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