Markets: The crude oil correlation continued in this short week, with all 4 indexes registering good gains, as crude oil futures gained 8.56% on the week. Investors moved back into more risk, and pushed the RUSSELL Small Caps up nearly 4%. This was the market’s best week thus far in 2016.
Dividend Stocks Update: These high dividend stocks go ex-dividend this coming week: N:ALJ, N:DBD, O:RMCF, N:AYR, N:BEP, N:BIP, N:BPY, N:CLDT, N:EXC, N:STAG, O:STB, N:EFC, N:HHS, O:ONB
Volatility: The VIX fell 17.6% this week, finishing at $20.53.
Currency: The US dollar rose vs. the pound, the euro, and the Swiss franc, and fell vs. most other major currencies.
Market Breadth: 28 of the DOW 30 stocks rose this week, vs. 11 last week. 96% of the S&P 500 rose this week, vs. 35% last week.
US Economic News: Core CPI rose .3%, its biggest gain in over 4 years. Unemployment Claims hit a 3-month low this week.
Industrial Production surprised to the upside, led by strong vehicle sales. NY State Mfg. had its 7th straight month of contraction.
Week Ahead Highlights: Friday’s surprisingly high CPI number has shifted investors’ perception of the probability of a possible FED rate hike by year end, up to 40%, from only 25% last week. With the Fed’s dual mandate of 2% inflation and 5% unemployment, and unexpected rise in CPI figures seems to shift rate hike possibilities higher. There will be several FED members giving speeches next week, which may add fuel to this shift.
Sectors and Futures:
Consumer Discretionary Stocks led this week, as Utilities trailed.
West Texas Crude Oil led this week, spurred on by reports of some OPEC and non-OPEC members reaching an agreement on freezing output, IF other members also agreed. However, crude faded on Thursday and Friday, after higher than expected US crude supplies were reported. Natural Gas trailed: