Weekly Economic & Market Update 5/11/2015

Global stocks ended this past week modestly on more bad news is good news. Early last week the Bureau of Economic Analysis (BEA) released the US Balance of Trade numbers for March that came in at -$51.37 billion. This number in itself was not encouraging but the US Trade Balance excluding petroleum was at an all-time high of -$43.36 billion. The back story here is the surging US dollar which makes US exports more expensive and imports much cheaper.

Additionally, here in the US, we had the release of the April non-farm payrolls number that showed a less than expected increase of $223,000 but a drastic revision of the March number from $126,000 to $85,000.

When combined, weak jobs and surging trade deficits equal a more hesitant Federal Reserve (FED) when it comes to hiking interest rates. On the fringes of economic rumblings there can be heard the opposite of rate hikes and that would be a return to quantitative easing.

Overseas, the economic data was light but creeping back into the headlines is the ongoing economic desperation in Greece. There are rumblings that the World Bank and the International Monetary Fund are putting together multiple plans to prepare for the possibility of an exit from the euro currency for Greece.

As would be expected in the current environment, both oil and currency moves are having broad economic impacts that will just now start to appear in economic numbers.

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 5-11

Chart 2 – Aggregate Bond

$AKG 5-11

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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.