Markets
For the week of Monday, January 6, 2014, through Friday, January 10, 2014:
- Standard & Poor’s 500 Index: 0.63%
- Dow Jones Industrial Average: -0.15%
- NASDAQ Composite: 1.06%
After the S&P 500 rose 29.6% on a price basis in 2013, stocks continued their lackluster start to the new year with the index dropping 1.2% so far in 2014 as of Monday. The Dow Jones Industrial Average fell 0.3%, and the NASDAQ shed 0.4% on Monday. Consumer Discretionary and Materials were among the weakest sectors. The S&P 500 posted its first gain of the year on Tuesday on encouraging economic news. The trade deficit for November narrowed to $34.25 billion on the month from a revised $39.33 billion in October, versus expectations of $40 billion, as exports increased to record levels and imports declined. November’s deficit was the smallest since October 2009.
On Wednesday, blue-chip stocks retreated, even as investors received good news that job growth increased to 238,000, topping forecasts for gains of 200,000. The employment news continued on Thursday when investors learned of a drop in unemployment filings. Friday’s markets closed mixed, following a smaller-than-expected 74,000 rise in December U.S. Nonfarm Payrolls. The jobless rate fell to 6.7% in December from 7.0%, but that came as the size of the workforce shrank.
Economic Data
Factory Orders:
- Manufactured goods orders rose 1.8% in November, reversing October’s 0.5% decrease.
- Durable goods orders were revised down from an increase of 3.5% to a 3.4% increase.
- Shipments of durable goods remained 1.8% higher.
- Unfilled orders rose 1%.
- Core capital goods were revised down to a 4.1% increase in orders versus the previously reported 4.5% rise.
- Core capital goods shipments were also revised down from 2.8% growth to 2.7% gain.
Institute for Supply Management Services Index:
- The ISM nonmanufacturing index fell from 53.9 to 53 for December.
- New orders fell from 56.4 to 49.4
- This is the first time since 2009 the index has been below the neutral threshold of 50.
- The employment index reversed most of November’s decline rising from 52.5 to 55.8.
Chain Store Sales Snapshot:
- Same-store sales fell 5.4% according to the International Council of Shopping Centers.
- Discount and electronic stores saw the largest declines.
- Winter storms across the Northeast were also affecting potential sales.
MBA Mortgage Applications Survey:
- The mortgage applications composite index fell 4.2% for the week ending December 27th, but increased 2.6% for the week ending January 3rd.
- Both purchase and refinance activity fluctuated between rising one week and falling the next offsetting each other.
Federal Open Market Committee Minutes:
- The December FOMC meeting minutes show policymakers felt diminishing economic returns and rising costs justified winding down the Fed’s open-ended quantitative easing program.
- Meaningful improvement in the job market was also part of the justification for cutting back on the monthly asset purchases.
- The minutes suggest quantitative easing will likely be lowered by $10 billion per meeting.
Jobless Claims:
- Jobless claims fell 15,000, against expectations for a slight rise.
- Initial claims fell to 330,000.
- Continuing claims rose slightly to 2,865,000.
- The previous week’s claims were revised higher to 345,000 from 339,000.
- The four-week moving average fell to 349,000 from 358,750.
Earnings:
Constellation Brands Inc. (NYSE: STZ)
- Constellation Brand’s reported a profit of $211 million, or $1.07 a share, a 93% increase over last year.
- After adjustments, Constellation earned $1.10 a share on revenue of $1.44 billion.
- Analysts expected $0.91 a share and revenue of $1.39 billion.
Monsanto Company (NYSE: MON)
- Monsanto reported earnings of $368 million, or $0.69 a share, compared to $339 million, or $0.63 a share, a year ago.
- Revenue rose 7% to $3.1 billion.
- Analysts expected $0.64 a share on revenue of $3.069 billion.
- For the full year, analysts expected $5.25 a share for 2014 while Monsanto expects between $5 and $5.20 a share.
Bed Bath and Beyond Inc. (NASDAQ: BBBY)
- Bed Bath and Beyond reported profits of $237.2 million, or $1.12 a share, compared to $232.8 million, or $1.03 a share, a year ago.
- Analysts expected BBBY to earn $1.15 a share on $2.88 billion in revenue.
- Comparable-store sales rose 1.3% versus a 1.7% increase a year earlier.
Interest Rates
- The two-year Treasury rate rose four basis points to 0.42%.
- The five-year Treasury rate increased three basis points to 1.75%.
- The 10-year Treasury rate slipped two basis points 2.98%.
- The 30-year Treasury yield fell four basis points to 3.88%.
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.
