The U.S. stock market closed the week at all-time highs, despite the spread of the coronavirus, as overall strong corporate earnings and positive economic data lift the market higher. Interest rates were virtually unchanged on the week as the 10-year treasury yield rose from 1.58% to 1.59%. Although the markets have shrugged-off concerns on the spread of the coronavirus, the price of gold did not as it rose 0.8% to $1,587 an ounce. Meanwhile, the price of crude oil jumped 3.7% to $52.25 a barrel amid reports of oil purchases by Chinese refineries.
This Week's Economic Highlights
Initial unemployment claims were little changed for the week ending February 8th, rising by only 2,000 to 205,000. Likewise, the more stable four-week average of initial claims was unchanged at 212,000. Continuing unemployment claims, which lags initial claims by a week, fell by 61,000 to 1.69 million.
The consumer price index (CPI) rose by a moderate 0.1% in January while core CPI, which excludes the volatile food and energy prices, rose 0.2%. Over the past year, CPI has risen at a relatively strong 2.5% while core CPI rose a slightly less, but still strong, 2.3%.
Retail sales in the U.S. rose a modest 0.3% in January as clothing store sales dropped 3.1%, its largest monthly decline since 2009. However, bar and restaurant sales and home furnishing sales have reported a 1.2% and 0.6% rise, respectively.
The manufacturing sector continues to struggle as industrial production slumped 0.3% in January. Trade tensions and a significant slowdown in Boeing 737 MAX production continue to be the main contributing factors to declines in industrial production.
“As with all risk, comes a valuable lesson: to strive for certainty is to doom oneself to mediocrity. Nothing is less safe than playing it safe and nothing guarantees loss like trying to avoid it.”
– Daniel Crosby
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