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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • U.S. stocks edged lower at the open on Monday, and the S&P 500 held near record highs, as investors largely shrugged off unexpectedly weak data in China.
    • China’s CSI300 share index plunged 3.3% to its lowest in nearly nine months.
    • Sunday (March 9) marked the five-year anniversary of the S&P’s 12-year low of 676.53, when the U.S. economy suffered its worst recession in seven decades.
  • McDonald’s U.S. sales continue to struggle in February. McDonald’s reported a bigger-than-expected drop in comparable global sales at established restaurants for February, with competition and bad weather battering U.S. sales. Worldwide sales fell 0.3% last month. 
    • U.S. same-restaurant sales fell 1.4%. In Europe, the company’s biggest market by revenue, restaurant sales last month rose 0.6%. Sales were down 2.6% in the Asia Pacific, the Middle East and Africa region.
  • Boeing said on Friday that “hairline cracks” had been discovered in the wings of about 40 787 Dreamliners that are in production, another setback for the company’s newest jet. Boeing said it immediately notified customers of potential delays. It said none of the jets potentially affected by the problem has been delivered. Airbus also has struggled with wing cracks on its A380 jet.
    • Norwegian Air was expected to have four Boeing 787 Dreamliners delivered this spring but delivery may now be delayed for a few weeks after Boeing reported finding some wing cracks. Norwegian Air has ordered 14 Dreamliners from Boeing in total, including three jets that are already in operation.
  • EBay rejected activist investor Carl Icahn’s two nominees to its board, saying both were unqualified, and urged shareholders to vote against them at its next annual meeting.
  • AT&T is cutting wireless data charges for individual customers who have no annual service contract, as it attempts to better compete with rival T-Mobile. Customers having one smartphone with no annual service contract will now pay $65 per month instead of $80.
  • IBM’s CEO said the company fell short of expectations last year and must address its struggling hardware businesses. IBM has struggled in a shift to the cloud era, where data and information are delivered online instead of being stored onsite. IBM’s sales fell 5% last year.
  • Google Reaps Tax Breaks in $1.4 Billion Clean Energy Bet. On a Northern California farm where silage for animal feed once grew, Google is generating power from more than 100,000 solar panels to heat nearby homes – - and double down on an area of energy many investors shun. The Galt solar farm, 20 miles south of Sacramento, is one of 15 alternative-energy projects that Google has funded since 2010 as part of a more than $1.4 billion investment in clean power production. 
  • Chrysler is recalling 25,250 Jeep and Dodge SUV’s globally to address a braking issue.
  • American Airlines plans to end agreements covering ticketing, baggage handling and frequent-flyer programs with JetBlue Airways after its merger with US Airways gave it “greater connectivity” along the U.S. East Coast. JetBlue has similar agreements with 30 other carriers.
  • High-yield bonds draw investors as emerging debt loses them. Emerging-market bonds, star performers just a year ago, are being replaced by high-yielding corporate debt from developed markets by investors searching for yield. Global high-yield corporate-debt issuance totaled a record $460 billion last year. Emerging sovereign and corporate debt also saw record volume, more than $400 billion.
    • The amount of debt globally has soared more than 40% to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates.
    • The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion.
    • Marketable U.S. government debt outstanding has soared to a record $12 trillion, from $4.5 trillion in 2007.
    • Corporate bond sales globally surged during the period, with issuance totaling more than $21 trillion, Bloomberg data show.

US ECONOMY & POLITICS

  • Severe winter weather likely affected U.S. jobs growth in February, Philadelphia Fed President Charles Plosser said.

EUROPE & WORLD

  • China’s exports unexpectedly tumbled 18.1% in February, against expectations for a 6.8% rise. Imports rose 10.1%.
  • China’s consumer prices rose at their slowest rate in 13 months in February as pork prices fell by their most in over a year, a sign that slowing growth rather than rising prices poses a bigger risk to the world’s second-biggest economy. The consumer price index (CPI) rose 2% in February from a year earlier. Pork prices fell 9%.
  • Chinese Car Sales Jump 18% to 1.6 million units last month as Japan Brands Extend Rebound. Toyota to Honda extended their recovery from the anti-Japan protests of 2012. Toyota and Honda’s sales in China rose 43% and 28%, respectively, last month. Nissan also saw gains. Ford’s sales surged 67% to 73,040 units last month. GM’s deliveries rose 20% last month.
  • Japan’s economy expanded less than estimated in the fourth quarter and the current-account deficit widened to a record in January. GDP grew an annualized 0.7% from the previous quarter.
  • Mexico gunned down a top drug cartel leader three years after he had been reported killed by the previous administration, the government said. The army and marines tracked down Nazario Moreno Gonzalez, alias “El Chayo,” yesterday after local authorities reported he was still alive.
  • Malaysia expanded the search area for a missing jetliner, dispatching ships to check debris near Hong Kong after investigators from nine countries struggled to solve the mystery of the plane’s disappearance.

TODAY in HISTORY

  • Charles I of England dissolves Parliament and rules alone for 11 years (1629)
  • Thomas Jefferson is appointed minister to France (1785)
  • Congress ratified the Treaty of Guadalupe Hidalgo, ending the Mexican War (1848)
  • U. S. Grant became commander of the Union armies during the Civil War (1864)
  • The first telephone call (“Mr. Watson, come here. I want you.”) was made by Alexander Graham Bell (1876)

Sources: Reuters, Bloomberg.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

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