Julex Market Weekly 03-10-2013 | Dow Jones Industrial Average Hit Record

Top Stories Last Week

• Dow Jones Industrial Average Hit Record

The Dow Jones Industrial Average hit record closing levels four days in a row this week, rising above the high it set back in 2007, just before the financial crisis. The main drivers are solid corporate earnings and improving economic data. S&P 500 Index jumped by 1.8%, while MSCI EAFE index rallied 2.0% and MSCI Emerging Market Index climbed 1.0%. Gold price was up slightly by 0.2%. The SPGC commodity index also gained 0.2%. The bond markets dropped for the week, Barclays US Treasury index lost 1.0% while US high yield bonds gained 0.3%.

• European Central Bank Kept Interest Rates Unchanged

The ECB decided to keep interest rates unchanged at 0.75%. Mario Draghi was optimistic about European economy and claimed there were several signs that confidence in the region was being restored. Although it considered a cut, ECB felt it would not be the best option. Draghi also discussed Italian election and downplayed its significance. The lack of government may make investors uneasy, but it won’t matter too much who is in power as the eurozone policies are binding for any party.

• US Job Market Improved in February

Employers stepped up hiring in February, moving the unemployment rate to a four year-low at 7.7%. It indicates that the US economic recovery is gaining momentum despite the negative impacts from higher taxes and deep government spending cuts. Nonfarm payrolls surged 236K jobs, much higher than economists’ expectation of 160K. The jobless rate was the lowest since December 2008, dropping from 7.9% in January.

• US Service Sector Continues to Expand

U.S. service sector grew at a faster pace in February and expanded for the 39th straight month, according to the Institute for Supply Management. The ISM said its survey of purchasing managers rose to 56% last month from 55.2% in January.

• Bank of Japan and Bank of Canada Wrapped up Meetings without Changes of Policies

The Bank of Japan ended a policy meeting on Thursday that marks the last for outgoing governor Masaaki Shirakawa whose tenure was marred by public sparring with the nation’s new prime minister over policy. The BOJ stays on the sidelines before the new team comes in.

Bank of Canada kept the central bank’s kept the benchmark interest rate at 1% Wednesday and indicated that borrowing costs are unlikely to go up any time soon.

Top Stories to Watch This Week

• Is S&P 500 Index Going to Break Record?

After Dow breaks record, S&P 500 index is 1% below its highest point set in 2007.

• US Retail Sales

Retail Sales in February is expected to increase by 0.3%.

• US Inflation

US headline consumer price index will rise to 2.0% YOY in February, according to economists’ survey.

• Chinese Industrial Production, Inflation and Retail Sales Report

We will get a good look at how robust the Chinese economy is.

• European Industrial Production Data

The Euro zone industry production is expected to rise by 0.4% in January.