Weekly Market & Economic Update 4/13/2015

Global stock markets moved up on the week with the return of what has been the theme of the last few years of ‘bad news is good news.’ Last week, although slow on economic data releases, offered some negative economic data points. As has been the case over the last few years, bad economic news has been viewed as reasons for the continuation of investor friendly economic stimulus. On the corporate side of things, earnings releases for the 1st quarter of 2015 are looking like they are going to come in weak which will also figure in to the big item – interest rate decisions by the Federal Reserve.

Here in the US the main data point that disappointed was the ISM non-manufacturing index that slipped slightly from 56.9 to 56.5. While on the surface this seems like a slight downward movement, in fact is meaningful in the sense that the US economy is driven primarily by consumption. Therefore, the non-manufacturing index weakening when most are viewing the economy as strengthening would lend itself to being bad news.

Overseas the main data point that was watched on the week was the consumer price index which came in at a year over year growth rate of 1.4% for March. Since China has been an economic powerhouse for quite some time, a CPI at this level is a strong indicator of a slowdown in economic activity. China has been quite active with economic stimulus and numbers like this support the idea that the bad news will be met with more stimulus. Accordingly, investors are buyers when they feel stimulus is waiting in the wings.

We continue to monitor global markets for opportunities or signs of stress.

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.

Chart 1 – S&P 500

$SPX 4-13

Chart 2 – Aggregate Bond

$AKG 4-13

 

 

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.