Weekly Market Review - May 16, 2018

Chad Hassinger |
Categories
Finance

By Bradley J. Rathe
Chief Investment Officer

May 16, 2018

"The inherent vice of Capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries." -Winston Churchill

Weekly look back:
  1. Those products linked to tariffs, including steel and aluminum, had strong inflationary pressures.  However, the rest of the inflation data for both the consumer and the producer were as expected and should not give the Federal Reserve extra incentive to move faster on rates.
  2. Crude Oil moved up beyond $70 a barrel, the highest level since 2015.  Prices were squeezed higher from both President Trump pulling out of the Iran nuclear deal and geopolitical flare ups in the Middle East.
  3. Many economists, and us included, have started to worry about the debt load of both consumers and the US Government.  Last week's consumer debt readings surprised the market by showing consumer credit coming in on the low end of estimates with revolving credit actually falling.
Weekly look ahead:
  1. Retail Sales are expected to moderate in April as Auto Sales were weak, however higher gas prices are expected to help buoy the number. The first quarter retail sales were a disappointment.
  2. Industrial Production is expected to get a boost from the mining sector.
  3. Federal Reserve District banks, twelve in total, are giving their regional reports, including Philadelphia, Atlanta and New York.  The strongest regions recently have been linked to manufacturing and energy production.
World Macro highlights for this week: 

Tuesday: Retail Sales, Empire State Manufacturing Survey
Wednesday: Housing Starts, Industrial Production
Thursday: Philly Fed Business Outlook Survey, Leading Indicators

2018 Yearly Index Returns as of 5/4/2018

S&P 500 

2.56%

Europe Equity

2.97%

Emerging Equity

0.62%

US 10 Yr

+.57 bp

US Small Cap Stocks

5.09%

 

Graph Of The Week

Industrial Production has been on the rise as has Capacity Utilization a key metric for the Federal Reserve to gauge future inflation pressures.

 

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.