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Weekly Update – March 15, 2019

  • Stock markets rallied for the week, with the major U.S. indexes nearing their highest levels of the year. Gains came
    despite softening industrial production in China, Germany and the United States that pointed to further loss of global
    economic momentum. Friday also saw a “quadruple witching” as equity and index futures and options expired.
  • The weak economic data drove a rally in U.S. government bonds. As prices rose, the yield on the 10-year Treasury note
    yield fell below its recent lower bound, ending the week near 2.59%. The U.S. dollar fell against a basket of currencies.
  • Oil prices rose as Venezuelan supply further tightened and Saudi Arabia signaled a continuation of production curbs.
    Gold prices edged up slightly on Brexit uncertainties and the weaker U.S. dollar.
  • U.S. industrial production rose 0.1% in February vs. January; economists had expected it to rise 0.3%. The increase was
    largely due to gains among utilities; by contrast, manufacturing, which represents about three-fourths of industrial
    production, fell 0.4%.
  • January-February China industrial production grew at an annual rate of 5.3%, a 17-year low. Analysts noted the figure
    would have been higher but for Lunar New Year effects.
  • German industrial production decreased 0.8% in January, disappointing economists who had hoped a gain would point
    to a better start for the Eurozone economy this year.
  • The University of Michigan’s index of consumer sentiment rose to 97.8 in March, after falling to 93.8 in February. Much of
    the improvement was driven by lower-income consumers, who said they expected higher inflation-adjusted incomes in
    the future. This suggested that consumer spending could rise in 2019.
  • Retail sales for January were better than hoped, rising 0.2% from December, when they contracted by 1.6%. January
    new home sales logged 607,000, weaker than expected and below December’s upwardly revised 652,000 (was
    621,000).
  • February headline CPI was up 0.2% vs. January, which was flat. The annual inflation rate was up 1.5%, level with January
    but down significantly from the recent peak of 2.9% in July 2018. January headline durable goods orders were up 0.4%,
    logging their third consecutive increase.\

CPWM Weekly Market Monitor (2019.03.15)

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