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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • U.S. stocks fluctuated at the open, erasing early gains after the Standard & Poor’s 500 Index came within four points of a record, as investors analyzed data showing an increase in retail sales and a drop in jobless claims.
  • Investors who beat a path out of global equity markets earlier this year are stampeding back in. More than $41 billion has returned to U.S. ETFs, reversing withdrawals that swelled to as much as $40.2 billion last month. The reversal is the latest sign of confidence in a five-year bull market that has gained momentum amid 11 straight quarters of expansion in U.S. GDP.
  • Amazon.com boosted the price of its Prime membership by 25 % to $99 a year. It is the first increase since the service’s introduction nine years ago.
  • Target missed early alert of credit card data breach. A Target team of security experts, armed with a malware detection tool made by FireEye, alerted company officials about a possible data breach on November 30, but they failed to respond to the warning signs, according to a media report.
  • Chinese e-commerce giant Alibaba Group Holding is “95 % certain” to choose New York as the venue for its IPO, the Financial Times reported. Analysts have estimated that the IPO could be worth more than $15 billion.
  • The U.S. Federal Trade Commission had opened an inquiry into Herbalife’s operations. Billionaire investor William Ackman, who has a $1.16 billion short bet on Herbalife, has for months called on regulators to investigate Herbalife’s distribution model, which he calls a “pyramid scheme,” where a company makes most of its money by recruiting new distributors rather than selling products to real customers.
  • Anne Sweeney, the president of Walt Disney’s Disney/ABC Television Group, will leave the media company in January after 18 years to pursue a career in television directing. The former Fox and Nickelodeon executive joined Disney in 1996. In 2005, she led negotiations with Apple that enabled Disney to become the first Hollywood studio to license its movies for download from Apple’s iTunes store.
    • CEO Bob Iger, in an interview with The Hollywood Reporter, said he had offered Sweeney a multi-year contract extension. “She shocked me by saying she didn’t really want to go long, that she was thinking about her life and exploring other things,” he said.

US ECONOMY & POLITICS

  • U.S. retail sales rebounded in February. Americans ventured out to shop last month even as colder-than-normal temperatures and severe snowstorms blanketed parts of the U.S. Retail sales increased 0.3 % last month. Economists had forecast retail sales rising 0.2 % in February.
  • Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 315,000. That was the lowest reading since late November.
  • U.S. business inventories rose in January, but a drop in sales meant it was now taking the longest time since late 2009 to move goods from shelves. Inventories rose 0.4 % after increasing 0.5 % in December. Economists had forecast inventories increasing 0.4 % in January. Retail inventories, excluding autos, go into the calculation of GDP, gained 0.7 %.
  • U.S. import prices rose more than expected and recorded their largest gain in a year in February as petroleum soared, but there was little sign of a broad pick-up in imported inflation. Import prices increased 0.9 % last month. Economists had forecast import prices rising 0.4 % in February. Import prices excluding petroleum rose 0.2 %. Petroleum prices rose 4.4 %, the largest rise since August 2012.
  • U.S. fourth-quarter growth is likely to be revised higher. JPMorgan and forecasting firm Macroeconomic Advisers said the quarterly services survey, from which the government’s estimates for services consumption is derived, showed a much more robust pace of consumer spending in the fourth quarter than the government’s estimated 2.6 % rate.
  • Pimco upgraded its assessment on U.S. economic growth on Wednesday, saying it now expects expansion to run between 2.5 % and 3 % in 2014.
  • Fed Nominee Fischer Says Easing Still Needed Amid Unemployment. Stanley Fischer, U.S. President Barack Obama’s pick for the No. 2 spot at the Federal Reserve, dove to one of the most important debates at the U.S. central bank, as he called for making financial stability an “explicit” policy focus.
  • Americans Stick with Obamacare as Opposition Burns Bright. President Barack Obama’s health-care law is becoming more entrenched, with 64 % of Americans now supporting it outright or backing small changes.

EUROPE & WORLD

  • China’s economy slowed markedly in the first two months of the year.
    • China’s industrial output rose 8.6 % in the first two months of 2014 from a year earlier, missing market expectations for a 9.5 % rise.
    • Growth in retail sales was the slowest in three years, up 11.8 % in January and February. Analysts had expected a rise of 13.5 %.
    • Fixed-asset investment, an important driver of economic activity, fared even worse. It was up 17.9 % in the first two months, way below forecasts for a 19.4 % increase.
  • Asia’s best performing stock market this year, Indonesia, is now seeing a string of upgrades in corporate earnings forecasts that could give the rally further momentum and cement its lead in the region. Jakarta’s stock market has risen 17.5 % in dollar terms so far in 2014.
  • Australia has committed to purchasing the U.S. Navy’s MQ-4C Triton unmanned aircraft. The U.S. Navy is still testing the Triton and has plans to buy 68, with the first due in service in 2017. The Triton is under development by Northrop Grumman.
  • A World Bank panel has rejected Venezuela’s request for a new hearing to contest a 2013 partial ruling that it failed to act in good faith regarding negotiations to compensate U.S. oil company ConocoPhillips for expropriations. ConocoPhillips initially asked Venezuela for $30 billion in compensation. Venezuela’s state oil company PDVSA had offered $2.3 billion in compensation.
  • Russia Said to Ready for Iran-Style Sanctions in Worst Case. Obama Warns Putin of Cost to Russia for Annexing Ukraine. The U.S. and Ukraine pressed Russia to cancel or postpone a March 16 referendum that would allow it to annex Crimea.

TODAY in HISTORY

  • Cambridge College was renamed Harvard University (1639)
  • The German-born English astronomer Sir William Herschel discovered the planet Georgium Sidus, later known as Uranus (1781)
  • Uncle Sam” cartoon appeared for the first time in N.Y. Lantern weekly (1852)
  • Clyde W. Tombaugh announced the discovery of the planet Pluto (1930)
  • The Encyclopedia Britannica discontinued its print edition after 244 years (2012)

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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