Weekly Market Review - February 13, 2018

Chad Hassinger |
Categories
Tax Planning

By Bradley J. Rathe
Chief Investment Officer

February 13, 2018

"The financial crisis revealed important weaknesses in many areas of our financial system."  Jerome Powell

Weekly look back:
  1. Stocks fell again last week after we made new highs on January 26th.  Some of the stated causes are higher inflation, higher rates and forced selling from volatility instruments.
  2. Central banks are in a transitional phase as the new Fed Chair Jerome Powell takes over the US Federal Reserve and as Central banks around the world move from an accommodative stance to a neutral stance towards monetary policy.
  3. Consumer Credit reported sizable increases the past few months.  A key metric we watch is how much leverage is in the system and we don't feel it is at concerning levels as of yet but something we will be watching closely. 
Weekly look ahead:
  1. Many blamed the higher inflation readings for the recent pullback in the markets.  This week we get PPI (Producer Inflation) and CPI (Consumer Inflation) and markets will be watching closely.
  2. Industrial production is expected to be weaker in January with only  .2% advance.  Other readings have been stronger and with expectations for new infrastructure spending this reading expected to accelerate as the year progresses. Additionally, Capacity Utilization is expected to bump up to 78%.
  3. Retail sales have been strong recently as consumer confidence has been high.  One of the negative consequences of market volatility is that consumers may start to wait to purchase until is passes.
World Macro highlights for this week: 

Wednesday: CPI, Retail Sales,
Thursday: PPI, Industrial Production,
Friday: Housing Starts, Consumer Sentiment, Import and Export Prices

Graph Of The Week

Heightened inflation fears are one of the reasons for the elevated volatility for risk assets recently. Inflation is still running around the fed target of 2%.

 

Unless otherwise expressly indicated, the opinions or views expressed in this article are the author's own and do not reflect, and may differ from, the opinions or views of Strategic Financial Group, LLC or others within Strategic Financial Group, LLC, including its officers, managers, owners, employees or other service providers.