JULEX MARKET WEEKLY 01-20-2013 | Stocks Ended the Week with Moderate Gains

Top Stories Last Week

• Stocks Ended the Week with Moderate Gains

U.S. stocks ended the week with moderate gains as earnings and economic data globally gave investors reason for hope the market’s recent rallies can last. Standard & Poor’s 500 Index climbed 0.9%, MSCI EAFE index gained 0.2%, and MSCI emerging market index gained 0.6%. Gold jumped 1.3% and the GSCI commodity index rallied 1.6%. In the bond markets, Barclays US Treasury index gained 0.1% and US high yield bonds were higher by 0.2%.

• US Banks Had a Good Quarter

Goldman Sachs had its most profitable quarter in two years, earning $2.9 billion in the fourth quarter of 2012. JP Morgan Chase also had a good quarter, raking in a net profit of $5.9 billion. But the bank cut the bonus of Jamie Dimon, its CEO, by half because of last year’s $6 billion loss on the “London Whale” trade.

• US Retail Sales Rose 0.5% in December

US consumers mostly ignored a bitter budget battle in Washington in December and increased retail spending by the most in the fourth quarter. U.S. retail sales rose a seasonally adjusted 0.5% in December and sales for November and October were revised slightly higher. The increase was the highest since September and demand was even stronger if gasoline sales are excluded.

• The Chinese Economy Grew by 7.8% Last Year

The Chinese government reported that China’s GDP expanded by 7.9% in the fourth quarter from a year earlier. That was the strongest since the economy gained 8.1% in the first quarter. For all of 2012, the economy grew 7.8%, its slowest gain since 1999. China’s GDP rose in part on the strength of increases in fixed-asset investment, exports and retail spending. It is new evidence that the Chinese economy may have turned the corner.

• US Housing Starts Rose 12.1% in December

US housing markets continue showing strength. The new construction on U.S. homes jumped in December to the highest rate in more than four years, with gains across the country, as well as in single-family homes and buildings. Housing starts rose 12.1% in December to a seasonally adjusted annual rate of 954K — the highest level since June 2008.

Top Stories to Watch This Week

• More Earnings Reports

More US large companies like IBM, Apple, Microsoft and McDonald’s will post quarterly results.

• Bank of Japan Meeting

Bank of Japan will meet this week decide on monetary policy. Economists expect further easing.

• Second Inauguration of President Obama

President Obama will face the same political reality in his second term: a Republican controlled House. It will take a lot of negotiation and compromise to

• UK Q4 GDP Growth

UK recovered from recession last quarter. Economists expect continuing recovery.

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