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March 18, 2013: Best Streak Since 96'

March 18, 2013
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Markets experienced another hot week as the Dow posted its best winning streak since 1996, with ten days up in a row, while the S&P 500 inched within 10 points of its historical high before closing lower on Friday.[i] For the week, the S&P 500 gained 0.61%, the Dow gained 0.81%, and the Nasdaq gained 0.14%.[ii] 

Were disappointed to report that lawmakers dont appear to be making any headway on the sequestration front. President Obama met with House Republicans last week but made little progress in convincing them to accept tax increases as part of a deficit reduction plan. With criticism flying from both sides, it seems that they are still too far apart to hope for a deal.[iii]

On a more positive note, the number of Americans filing new unemployment claims fell for the third straight week, indicating that the labor market is recovering steadily. Initial claims dropped by 10,000 claims, handily beating expectations of a rise in claims. Even better, the four-week moving average for new claims, widely considered a less volatile measure, fell to a new five-year low, suggesting that underlying labor market trends are improving.[iv]

A surge in energy costs led to an increase in the Consumer Price Index, a broadly used measure of inflation. The CPI increased by 0.7% in February after remaining flat in January. However, excluding volatile food and energy prices, the more stable core prices increased just 0.2%, which was in line with expectations.[v]

Historically, markets have often pulled back after reaching historic highs. While we believe that general economic trends are heading in the right direction, in the short term, we won't be surprised by some market consolidation as traders take profits and plan their next moves. We always maintain focus on long-term financial movements and use these short-term dips and rallies to build new positions and find opportunities.

 

ECONOMIC CALENDAR:

Wednesday: Retail Sales, Import and Export Prices, Business Inventories, EIA Petroleum Status Report, Treasury Budget
Thursday: Jobless Claims, Producer Price Index
Friday: Consumer Price Index, Empire State Mfg. Survey, Treasury International Capital, Industrial Production, Consumer Sentiment




Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance and Treasury.gov. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.


The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. 

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. 

The Nasdaq is a computerized system that facilitates trading and provides price quotations on some 5,000 of the more actively traded over-the-counter stocks