This week it’s politics as usual, as the temper tantrum of partisanship has the Federal Government shut down. While this will have a temporary muting effect on the markets, it will likely be minimal in nature. Odds are this problem gets solved in short order, and the markets will push even higher on the news. If the futures are any indication, markets seem to be taking this thing in stride.
The underlying case for this market — the coordinated global growth cycle — is the theme to pay attention to for now and the trend appears to be a powerful one.
In short, don’t over-think this, because the markets sure aren’t. Washington and the mainstream media outlets can have a field day with this thing, but profits are still up. And with an election just around the corner, no party can afford to let the government fall apart on their watch over an immigration issue. This power struggle will likely end in short order. When it does, the markets probably won’t care much about that either.
For the week ending January 19th, 2017:
1. Major US Stock indices set new record highs;
2. Jobless claims fell to 220k, the lowest reading in 45 years;
3. Industrial production rose 0/9% month over month, well above the 0.4% expected increase.
4. The housing market index fell from 74 to a still strong 72.
5. MBA mortgage applications rose 4.1% week over week; Housing permits rose from 1.298M to a 1.302M.
1. Treasury yields reach highest since 2014, dollar gains;
2. Gold climbs on strength in precious metals, crude slides — a combination that is potentially worrisome.
3. Consumer sentiment slowed from 95.9 to 94.4, below the 97 expected reading.
4. Housing starts fell from 1.297M to a 1.192M SAAR, below the 1.28M expected.
5. Empire state manufacturing fell from 18 to 17.7 (last reading was revised higher to 19.6)
Quote of the week:
“Strive not to be a success, but rather to be of value.”
– Albert Einstein