Market Update

The Economy

• Economic data was mostly positive this week, as the recovery continued to take hold. 
• U.S. retail sales data came in better than analysts expected. Retail sales excluding autos increased 0.8% versus the consensus estimate of 0.1%. 
• The U.S. consumer sentiment index declined from 73.6 in February to 72.5 in March. 
• U.S. wholesale inventories fell unexpectedly in January, which signaled that companies are struggling to keep up with demand. 
• Mortgage applications in the U.S. had their second week of increases. 
• Initial jobless claims dropped for a second straight week. 
• U.S. job openings for January were the highest in a year, indicating that employers are gaining confidence in the recovery. Unemployment remains high at 9.7%. 
• The U.S. trade deficit narrowed for January. Imports fell for the first time in five months, and exports fell for the first time in nine months.
• The Investment Property Databank reported that U.K. commercial property values rose 2.7%, the first increase on an annual basis in over two years. 
• European industrial output for January had its biggest increase in 20 years. 
• China’s inflation reached a 16-month high.

Economic Calendar

• The Empire State Manufacturing Index and capacity utilization will be released March 15. 
• Housing starts, building permits and the Federal Open Market Committee rate decision will be released March 16. 
• The Producer Price Index will be released March 17. 
• Initial jobless claims, continuing claims, the Consumer Price Index and the Philadelphia Fed Manufacturing Index will be released March 18.

Stocks

• Global markets were mostly flat as market participants’ sentiment gradually improved. 
• In the U.S., value stocks outperformed their growth counterparts, and small-cap stocks outperformed their large-cap brethren. Financials and Telecommunications led the way, while Consumer Staples lagged. 
• In the U.K., Telecommunications, Consumer Services and Energy led, while Consumer Staples, Financials and Healthcare lagged. 
• In Europe, Information Technology, Consumer Services and Utilities led, while Consumer Staples, Healthcare and Telecommunications lagged.

Bonds

• Global bond market prices were flat as investors regained their risk appetites and continued to focus on equities and riskier bonds. 
• From a general broad-sector bond market perspective, European bonds beat U.S., U.K. and Japanese bonds. 
• Global government bonds remained flat for the week. 
• High-yield and emerging market debt both continued to lead the global aggregate bond market, as investors became more comfortable with adding riskier assets to their portfolios. 
• European Union (EU) ministers will meet next week to discuss how they plan to help Greece tackle its funding issues.

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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice. This information is for educational purposes only.

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