Julex Market Weekly 03-31-2013 | S&P 500 Index Hit a Record High

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


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.