Weekly Market Review - March 13, 2018

Chad Hassinger |

By Bradley J. Rathe
Chief Investment Officer

March 13, 2018

"If you want to understand geology, study earthquakes. If you want to understand the economy, study the Depression." - Ben Bernanke

Weekly look back:
  1. US Jobs were strong and inflation fears subsided. The Payrolls were more than 100k above the 205k consensus. Conversely, with the strong jobs report average hourly earnings only rose .1% versus .2% expected.
  2. ISM Services and ISM Manufacturing are showing very strong resilience. Manufacturing and Services have strengthened with the recent tax policy changes.
  3. US Small cap stocks were the biggest benefactor of all the tariff talk last week as the outlook for the domestic economy grew stronger. The Lead Economic advisor to President Trump, Gary Cohn, stepped down so future economic policy may be flux for the short term. 
Weekly look ahead:
  1. Both consumer and producer inflation are expected to continue their pace of moderate inflation. Figures should keep the Federal Reserve on pace to raise rates at their next meeting on March 21. 
  2. Retail Sales are expected to snap back in February as they disappointed the past two months. Auto sales and gas sales are a substantial source of volatility for this number.
  3. Industrial Production has been held back by manufacturing however, with strong factory hours worked in the most recent jobs report; expectations have risen for a stronger number.  
World Macro highlights for this week: 

Tuesday: Tuesday: CPI (Consumer Inflation), NFIB Small Biz Optimism Index
Wednesday: PPI (Producer Inflation), Retail Sales
Friday: Industrial Production, Consumer Sentiment

Graph Of The Week

Capacity Utilization is key driver for future inflation. As the economy gets closer to capacity it starts to pressure  all costs.

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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.