Market Commentary, 04/15/16
The U.S. stock market surged early in the week, but tapered off to close at 17,897.32 on the Dow and 2,080.73 for the S&P 500. The choppy trading at the end of the week comes as traders are expressing some uncertainty in the short term outlook following recent gains. These week ending woes may also be due to the latest batch of U.S. economic data.
The Consumer Price Index (CPI), which measures the change in price of a market basket of consumer goods, reported an increase of 0.1% that fell short of the expected 0.2%. This tame inflation data adds to the recent speculation that the Federal Reserve (The Fed) will not raise interest rates later this month.
The Fed reported that industrial production fell by 0.6% in March, which was significantly lower than the expected 0.1% drop. The larger than expected decrease was primarily due to steep declines in mining and manufacturing output. Industrial production has fallen six of the last seven months.
A University of Michigan study shows an unexpected deterioration in consumer sentiment in the month of April. Consumer sentiment (used as an indicator of overall health of the economy) has fallen four months in a row. “Consumers reported a slowdown in expected wage gains, weakening inflation-adjusted income expectations, and growing concerns that slowing economic growth would reduce the pace of job creation,” said Richard Curtin, the chief economist of the survey.
Considering this less than positive news, our indicators are still apprehensive given the market volatility. Our outlook is to continue our conservative stance until we enter a confirmed bull market.
Wayne Copelin, CFP®
President, Copelin Financial Advisors, Inc.
514 Brooks Street
Sugar Land, TX 77478
Phone (281) 240-2902
Fax: (281) 240-2856
Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC Advisory Services offered through Harvest Investment Services, LLC., a Registered Investment Advisor Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.