Weekly Market & Economic Update 3/9/15

Global markets hit a rough patch across the board this past week driven mainly by weak economic data points and growing concern over the beginning of rising interest rates in the US.

Here in the US, the ISM Manufacturing Index for February came in slightly lower than the January report but the ISM non-manufacturing Index (read as services) came in a little stronger in February. The heavily watched reports of the week were the lower than expected personal spending and the tepid core Personal Consumption Expenditures (PCE). All of the previously mentioned reports point to the US Federal Reserve (FED) wishing to hold off on an increase in interest rates. But, the superficially improving job market and the length of the zero bound interest rates is spurring the FED to look to take action sooner rather than later.

Overseas, the European economy is still languishing with proof coming this past week with its Q4 2014 GDP report of .9%. Additionally, this past week the European Central Bank (ECB) decided to continue to hold interest rates in the zero bound range and maintain a deposit facility rate for EuroArea banks in negative territory. So, for this year we have seen Sweden revert to a negative benchmark interest rate and Denmark has cut its benchmark rate into negative territory. Denmark though has taken it a step further with some of its banks imposing fees on retail investors for holding money on deposit.

As we have said for years now, the economic environment we live in is not only unprecedented, but also ripe with risk. Hence, our cautious approach. As always, we continue to watch global markets and economies for stress points and opportunities.

Getting Technical With Market Charts

In this section we present charts of the S&P 500 Stock Index and the US Bond Market Index relative to their 50 day (blue line) and 200 day (red line) moving averages. In addition, we have added the blue shaded area which represents the recent trading channel. The 50 and 200 day moving averages are widely followed market trend indicators that provide a general picture of the health of the broad indexes.

$SPX 3-9

$AKG 3-9

 

Securities are offered through First Allied Securities, Inc. (FASI), a registered Broker Dealer, Member FINRA/SIPC. Advisory Services offered through Lighthouse Financial Advisors, Inc., a Registered Investment Advisor dba Lighthouse Wealth Management (LWM). Lighthouse Financial Advisors, Inc. is not a subsidiary or control affiliate of FASI.

Disclaimer – Information contained herein is taken from sources believed to be reliable, but cannot be guaranteed as to its accuracy. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. The Standard and Poors 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. The Barclays Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Contact your investment professional to discuss suitability for your particular circumstances. This article does not constitute an offer of sales of any securities. Securities trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Lighthouse Financial Advisors, Inc., dba Lighthouse Wealth Management, is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.

About Katy Chase

Katy Chase, MBA, contributes her own perspective to the team. With previous training in Marketing and French, her perspective offers a mixture of macroeconomic, cultural, and client-focused experiences. In addition, Katy is a baker (with a specialty in chocolate), athlete, perpetual student/learner, volunteer, blogger, Nittany Lion, daughter, grand-daughter, sister, and wife.