Week in Review: Global markets moved to new all-time highs as the threat of Russia imminently invading the Ukraine has eased. The Dow Jones Industrial Average gained 131 points, or 0.8%, to close at 16,453. The S&P 500 Index ended the week up 19 points, or 1.0%, to close at an all-time high of 1,878. The Nasdaq Composite gained 28 points, or 0.7%, ending the week at 4,336. The S&P MidCap 400 Index gained 14 points, or 1.0%, finishing at 1,389; it made a new all-time high, but closed the week slightly off of that high. The Russell 2000 gained 20 points, or 1.7%, to close at 1,203, also making a new all-time high earlier in the week while closing slightly lower. The MSCI ETF EFA, the proxy for developed international equity markets, gained 0.2% for the week. Emerging markets, as represented by the MSCI ETF EEM, were up 0.1%. Domestic high yield corporate bonds closed down -0.2%, as measured by the Merrill Lynch US High Yield Master II Index. The week began with fear of a shooting war breaking out in Europe as Vladimir Putin massed his army on the eastern border of the Ukraine while moving troops to Crimea, Ukraines southernmost province on the Black Sea. This put the risk-aversion trade into play as stocks crumbled globally. The Russian stock market and the ruble fell precipitously. Gold and US Treasuries soared as people sought safety. Oil also rose steeply on fears of supply disruption. The Russian Central Bank was forced to hike its key rate by 1.5% to 7.0% to try and prevent capital flight from Russia. On Tuesday Vladimir Putin said that he wasnt planning an invasion into Ukraine, suspended Russias war games and sent his troops back to base; global markets responded immediately and rebounded smartly, moving much higher for the rest of the week. The S&P 500 Index and other domestic indices hit new all-time highs. Although recent economic data has shown the impact of the abnormally harsh winter, 175,000 jobs were added in February, many more than the roughly 150,000 estimated. The unemployment rate rose to 6.7% from 6.6%. Contributing to a rosier view of the US labor market, initial jobless claims fell by 26,000 in the latest weekly report. The better than anticipated Non-Farm Payroll report makes it more likely that the US Federal Reserve will continue the gradual tapering of monetary stimulus. The Fed next meets on March 18th and 19th. The Feds latest Beige Book report, which contains economic reports from the 12 Federal Reserve districts, suggests that the severe weather, particularly in the Northeast, held back shopping and consumer spending in January and February. Two of the Feds 12 districts -- New York and Philadelphia -- reported falling activity largely as a result of particularly severe weather. 734-261-8289
Posted on: Mon, 10 Mar 2014 16:45:06 +0000