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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • U.S. stocks rose at the open on Tuesday as an increase in a manufacturing index last month boosted optimism on the economy.
  • Facebook’s Zuckerberg earns $3.3bn through share options. Zuckerberg has now exhausted his supply of stock options as a result of Facebook’s public offering.
    • He was given 60 million shares to help him with his tax bill.
    • His base salary for 2013 fell to $1, like other tech leaders such as Google’s Larry Page and former Apple boss Steve Jobs. However, his total compensation for the year was $653,165, down from $1.99m in 2012.
    • Zuckerberg still owns 426.3 million Facebook shares, which are worth around $25.7bn.
  • Ford said deliveries rose 3.3 % to 243,417 cars and light trucks last month. Ford’s F-Series pickups gained 5.1 % to 70,940, while Fusion sales rose 8.8 % to 32,963.
  • Chrysler March U.S. sales up 13 %; GM delays statement. Edmunds had expected Chrysler sales to rise 11 %.
    • Each month, auto sales are an early indicator of U.S. consumer spending. January and February sales were slowed by massive snowstorms and cold temperatures over much of the United States.
    • Forty analysts polled by Thomson Reuters expect an annualized selling rate of 15.8 million vehicles, or about a 2 % increase in sales from last March.
    • LMC Automotive two weeks ago lowered its 2014 U.S. sales forecast to 16.1 million from 16.2 million vehicles.
  • Aston Martin in talks with Mercedes-Benz for its first SUV.
  • GM failed to report ignition switch concerns to regulator. The cases, some dating from June 2003, stem from warranty claims and comments from consumers and GM technicians.
  • GE Healthcare recalls hundreds of baby ‘warmers’ in China over safety fears.
  • U.S. Senate panel to grill Caterpillar executives at tax hearing. In a 99-page report released on Monday, the Senate the Permanent Subcommittee on Investigations said Caterpillar avoided paying $2.4 billion in U.S. taxes from 2000 through 2012 by moving profits from sales of replacement parts through a low-tax unit it set up in Switzerland.
  • The FBI has opened up a probe into whether high-speed trading firms are engaged in insider trading. High-speed trading is where traders create complicated algorithms to buy and sell stocks in milliseconds. Some investors and regulators have argued this gives them an unfair advantage.

US ECONOMY & POLITICS

  • Manufacturing growth accelerates in March. The Institute for Supply Management (ISM) national factory activity rose to 53.7 in March, which was up slightly from February’s read of 53.2 but below the median forecast of 54.0 of economists.
    • Gains in the month came alongside a rebound in the production sub index, which jumped to 55.9 from 48.2, ending a three-month string of slowing growth.
    • The forward-looking new orders index rose to 55.1 from 54.5.
  • Factory activity growth slows slightly in March. Markit’s U.S. Manufacturing Purchasing Managers Index (PMI) stood at 55.5 in February. The latest reading was solidly ahead of the 53.7 January reading.
    • The new orders component fell to 58.1 from 59.6 in February.
    • Output edged down to 57.5 from 57.8 while firms took on workers for a ninth consecutive month.
  • U.S. construction spending barely up as homebuilding tumbles. Construction spending edged up 0.1 % to an annual rate of $945.7 billion in February. Economists had forecast construction outlays to be flat in February.
    • An unusually cold and snowy winter disrupted economic activity early in the year. Growth in the first three months of this year is expected to have slowed to an annualized pace below 2 % after the economy expanded at a 2.6 % rate in the fourth quarter.
    • However, a 1.2 % surge in spending on nonresidential construction projects, which include factories and gas pipelines, lifted overall private outlays to their highest level since December 2008.
    • The decline in private residential construction was led by a 1.1 % drop in single-family home building.
    • Public construction spending nudged up 0.1 % in February, with a 5.8 % jump in federal government outlays offsetting a 0.5 % fall in state and local government spending.
  • Republican Paul Ryan to unveil U.S. budget plan on Tuesday. The House Budget Committee, which Ryan chairs, said in a statement that it has scheduled a vote on a budget resolution on Wednesday. Ryan has revealed no details of his plan.

EUROPE & WORLD

  • Major economies end first-quarter on weaker note.
    • The eurozone’s final manufacturing PMI came in at 53.0, matching an earlier flash reading but below February’s 53.2.
    • Official data from the Chinese government showed that manufacturing expanded slightly in March. A final reading of the official purchasing managers’ index (PMI) was 50.3 in March, up from an eight-month low of 50.2 in February.
    • However, a separate survey by HSBC and Markit saw a contraction in Chinese manufacturing activity, with a reading of 48.0 – the lowest since July.
  • Tax hike hurts Japan business mood more than in 1997. Japanese business sentiment barely improved in the three months ending March. The move, which will see sales tax rise from 5% to 8%, is intended to combat the country’s rising debt as its population ages.
  • German unemployment falls by more than expected in March. The number of people registered as unemployed fell by 12,000 to 2.901 million. The improvement takes the unemployment rate to 6.7%.
  • Greece won’t require a third international bailout if its economy continues to revive, according to Finance Minister Yannis Stournaras.
  • Paris Votes First Female Mayor as Job Loss Hurts Growth.

TODAY in HISTORY

  • Frederick Muhlenberg of Pennsylvania was elected the first Speaker of the House of Representatives (1789)
  • The first U.S. weather satellite, TIROS-1, was launched from Cape Canaveral (1960)
  • President Nixon signed a bill into law banning cigarette ads from radio and television (1970)
  • Steve Wozniak and Steve Jobs founded Apple Computer (1976)
  • President Bush signed the “Laci Peterson” bill making it a separate federal crime to harm a fetus during an attack on the mother (2004)

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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