Markets
For the week of Monday, March 17, 2014 through Friday, March 21, 2014:
- Standard & Poor’s 500 Index: 1.38%
- Dow Jones Industrial Average: 1.48%
- NASDAQ Composite: 0.75%
U.S. stocks rebounded after last week’s selloff, as investors took in stride Crimea’s widely expected vote to secede from Ukraine. The rally continued Tuesday, bringing the S&P 500 within a fraction of another record high. On Wednesday, the rally came to a halt as Federal Reserve Chairwoman, Janet Yellen, said the central bank could begin raising interest rates earlier than many observers expected. The statements underscored investors’ continuing anxiety over Fed policy. Thursday, the markets teetered between gains and losses as investors assessed the Fed’s intent to raise interest rates. The markets closed lower Friday, weighing down what was otherwise a positive week for the overall market. Trading was volatile throughout the week, as investors received favorable U.S. economic data, disappointing Federal Open Market Committee comments, rising tensions between the West and Russia and concerns about slowing growth in China.
Economic Data
Industrial Production:
- Industrial production rose 0.6% in February.
- Manufacturing production rose 0.8% in February, compared to January’s 0.9% decline.
- Utilities fell 0.2%.
Chain Store Sales Snapshot:
- The chain store sales index increased 0.7%.
- Year-over-year the index is up 1.5%.
Consumer Price Index:
- The Consumer Price Index increased 0.1% in February.
- Consensus expectations were for a 0.2% gain.
- The energy index offset last month’s 0.6% increase with a 0.5% decline.
- For the third month, core consumer inflation rose 0.1%.
Housing Starts:
- Housing starts are running at a pace of 907,000 annualized units.
- However, starts are down 6.4% year-over-year.
- Permits increased 7.7% month-over-month.
- Completions rose 4.4%.
MBA Mortgage Applications Survey:
- Mortgage applications declined for the second straight week.
- The composite index fell 1.2%.
- The purchase index fell 0.9%.
- Refinance activity declined 1.3%.
Federal Open Market Committee Meeting:
- The Federal Reserve reduced monthly asset purchases from $65 billion to $55 billion.
- The reduction was split evenly between Treasuries and mortgage-backed securities.
- Janet Yellen also announced the FOMC will be dropping the 6.5% unemployment rate and the 2.5% inflation thresholds going forward.
Jobless Claims:
- Initial claims for unemployment insurance increased 5,000 to 320,000.
- The four-week moving average was down 3,500 to 327,000.
- Continuing claims increased 41,000 to 2.89 million.
Existing Home Sales:
- Sales of existing homes were almost flat at 4.60 million annualized units.
- The pace of sales is down 0.4% from January.
- Year-over-year sales are down 7.1%.
- Months of supply increased from 4.9 to 5.2 months.
Earnings
Oracle Corporation (NYSE: ORCL)
- Oracle posted higher revenue and profit that failed to satisfy investors looking for signs of a sustained turnaround.
- The company’s overall revenue rose 4% to $9.31 billion, which was a little below the $9.36 billion analysts expected.
- Net income was $2.56 billion, up 2%.
- Earnings per share, which reflected a decrease in the number of shares outstanding, rose 8% to $0.56.
- On an adjusted basis, Oracle earned $0.68 a share.
General Mills, Inc. (NYSE: GIS)
- Earnings rose 3%, to $410.6 million, or $0.64 a share, versus $398.4 million, or $0.60 a share, last year.
- Last year’s quarter included a $6.1 million charge.
- Removing certain items, earnings per share were $0.62, missing analysts’ expectations of $0.64 a share.
- Revenue dipped 1% to $4.38 billion from $4.43 billion, hurt by bad winter weather, lower volumes and unfavorable foreign currency translation.
- Wall Street expected $4.41 billion in revenue.
FedEx Corporation (NYSE: FDX)
- FedEx’s profit rose 5% from a year ago despite storms that raised the company’s costs.
- The results were below analysts’ expectations.
- FedEx earned $378 million, or $1.23 a share, from $361 million, or $1.13 a share, last year.
- Analysts expected $1.45 a share.
- Revenue rose 3% to $11.30 billion from $11 billion, missing analysts’ forecast of $11.43 billion.
ConAgra Foods, Inc. (NYSE: CAG)
- ConAgra’s earnings rose to $234.3 million, or $0.56 a share, from $120 million, or $0.29 a share, last year, beating analysts’ estimates.
- Excluding items, the company earned $0.62 a share.
- Analysts expected a profit of $0.60 a share on revenue of $4.4 billion.
- Total sales rose 14.5% to $4.39 billion.
- Revenue at ConAgra’s consumer foods business fell 0.5% to about $1.87 billion in the quarter, due to a 3% fall in sales volumes.
Lennar Corp. (NYSE: LEN)
- Lennar’s earnings climbed 36%, as orders for new homes rose and it delivered more of them at higher prices.
- Lennar earned $78.1 million, or $0.35 a share, versus $57.5 million, or $0.26 a share, last year.
- Lennar’s earnings easily beat analyst expectations of $0.28 per share.
- Revenue increased to $1.36 billion from $990.2 million, topping analysts’ forecast of $1.25 billion.
- New orders rose 10% to 4,465 homes, while deliveries climbed 13% to 3,609 homes.
Interest Rates
- The two-year Treasury rate rose eight basis points to 0.43%.
- The five-year Treasury rate increased 17 basis points to 1.71%.
- The 10-year Treasury rate increased 12 basis points to 2.77%.
- The 30-year Treasury rose six basis points to 3.66%.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
