Weekly Economic & Market Update 6/1/2015

Global stocks moved lower last week. Although the trading week was shortened by the Memorial Day holiday, there was a large amount of meaningful economic data point releases from around the globe.

Here in the US, Durable Goods orders ex-Transports (Core CAPEX) came in weaker than expected at an increase of .5% for the month of April. Core CAPEX spending and the movement of the S&P 500 have a high degree of correlation as can be seen in the chart below. Because CAPEX can be volatile we also look at smoothing the number with a three month average which you can see in the chart via the red line. We will continue to watch this chart very closely for clues as to how the manufacturing sector of the US economy is doing.

CAPEX

Additionally, in the US, the 1st estimate of annualized US Gross Domestic Product came in at a seasonally adjusted -.7%. While most analysts are pointing to the harsh winter as the cause, it is important to remember that the numbers are already seasonally adjusted. So, we will be watching the revisions to Q1 GDP as well as how Q2 shakes out.

Overseas, Japan looks to be cashing in on the continuation of low oil prices. Japan reported increased exports and declining imports for the month of March. In Europe, economic sentiment as reported by the European Commission remained steady for May at 103.8. As well, private loans in the EuroArea were reported flat which is an improvement over the long trend lower.

We continue to watch the global economy for opportunities and 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 6-1

Chart 2 – Aggregate Bond

$AKG 6-1

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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.