Business & Finance

What Are These Central Banks Doing? Weekly Update – January 26, 2015

06e578e0f39c89ef53e5_jan_22_weekly.png
42c8b6c5e0861a7d6bc4_dt.jpg
06e578e0f39c89ef53e5_jan_22_weekly.png

Basking Ridge,NJ- Markets ended the week in the black for the first time in 2015 on the back of major moves by multiple central banks. For the week, the S&P 500 gained 1.60%, the Dow grew 0.92%, and the Nasdaq added 2.66%.[i]

Central banks ruled market headlines last week with the European Central Bank, Bank of Canada, People’s Bank of China, and Bank of Japan all making key announcements. The ECB led the pack by announcing its first round of quantitative easing, promising EUR 60 billion in monthly asset purchases. The move is designed to boost the Eurozone economy and fight deflationary pressures, though some experts are dubious about the potential for success.[ii] In an effort to stem outflows of cash from the Chinese economy, the Chinese central bank used short-term monetary tools to inject more liquidity into the financial system ahead of the Lunar New Year Holiday.[iii] The Bank of Canada joined the party by announcing a surprise interest rate cut to spur growth in the face of falling oil prices.[iv]

Markets reacted positively to the news that central banks are making an effort to boost the global economy, helping the major indexes post gains for the first time this year. However, the news last week wasn’t all good.

Sign Up for E-News

The Eurozone faces another major challenge in Greece; voters went to the polls Sunday and elected the radical left Syriza party, which wants to end austerity measures and refuse European debt inspections. Though it’s unclear if the party has enough parliament seats to form a government, the election result highlights Greek voters’ frustration with austerity and increases the risk of a so-called “Grexit,” a Greek exit from the Eurozone.[v]

The U.S. is also facing new foreign policy challenges. The death of Saudi Arabia’s King Abdullah bin Abdulaziz Al Saud may change America’s relationship with its largest ally in the Middle East and affect global oil markets.[vi] Yemen, a major Saudi supporter and U.S. ally, also experienced leadership turmoil with the resignation of its president after being besieged by rebel fighters.[vii] If the political vacuum causes Yemen to splinter along ethnic and religious lines, it could spark civil war, also threatening U.S. policies in the Middle East.

Looking ahead, we see a lot of uncertainty this week. Though the U.S. continues to do well, we see markets driven by energy prices, worries about Europe, and concern that new central bank policies may not be enough to stoke economic activity in the rest of the world. Next week’s Federal Reserve Open Market Committee meeting will be key in setting the tone for the year’s monetary policies. Although the Fed has indicated that it may raise rates this year, the increased stimulus measures from its counterparts overseas may make it harder for the Fed to move ahead with rate hikes. Even if global economic policy isn’t part of the Fed’s mandate, the interconnectedness of the world’s economy and the importance of the U.S. dollar in global trade mean our central bankers must take into account global risks when making policy decisions.[viii] The week ahead is also filled with important earnings reports, which could make or break the Q4 earnings season. Thus far, earnings have been uninspiring, though overall earnings growth is expected to be positive.[ix]

When markets turn volatile, it’s important to remain disciplined by sticking to your own financial strategies while staying flexible enough to take advantage of opportunities as they arise. We’re keeping a close eye on market events as they develop and will keep you updated.

HEADLINES:

Jobless claims fall from 7-month high. Weekly claims for new unemployment benefits dropped last week, erasing the previous week’s increase, which pushed weekly claims to the highest level seen since June. Seasonal factors around holiday hiring are likely to blame for the volatility.[i]

U.S. factory activity slows. The manufacturing sector continued to grow in January, but the pace of activity slowed as new orders weakened. Though some seasonal factors may be affecting data, job creation in the sector remains steady, indicating underlying demand may not have dropped.[ii]

Single-family housing starts to reach multi-year high. Groundbreaking on new single-family homes reached the highest level in 6-1/2 years in December. Though housing activity has lagged in the last year, the new construction trend could indicate greater demand for housing as the economy improves.[iii]

Mortgage applications surge. The volume of mortgage applications increased dramatically last week, pushing total volume 41% higher than the same period last week, in another hopeful sign for the housing sector. Economists cite low mortgage rates and a reduction in Federal Housing Administration mortgage insurance premiums as factors.[iv]

Share the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Like" link above and the 'Share". We love being Liked and Shared!

 

About Wealth Financial Partners, LLC

Wealth Financial Partners is an independent retirement planning and wealth management firm based out of Basking Ridge, New Jersey with expertise in financial life planning including investments, long-term care insurance, life insurance, 401(k) rollovers, retirement planning, tax planning and wealth conservation. For more information about Wealth Financial Partners, LLC, (877) 714-2362

106 Allen Road, 1st Floor, Basking Ridge, NJ 07920  walter@walterpardo.com

Securities and advisory services are offered through Independent Financial Group, LLC (IFG), a registered broker-dealer and investment advisor. Member FINRA/SIPC. Wealth Financial Partners and IFG are unaffiliated entities. OSJ Branch: 12671 High Bluff Dr. Ste 200 San Diego, CA 92130 licensed in: CA, FL, GA, KS, MN, NY, NJ, IL, PA, OH, SC, CT. 

Information provided is from sources believed to be reliable however we cannot guarantee or represent that it is accurate or complete. Because situations vary, any information provided on this site is not intended to indicate suitability for any particular investor. Hyperlinks are provided as a courtesy. 

The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer.

TAP Into Another Town's News:

You May Also Be Interested In

Sign Up for E-News

Basking Ridge

Somerset County Residents May Drive Through and Drop Off Unwanted Medicines March 17 in Basking Ridge

February 22, 2018

 

BERNARDS TWP., NJ – The first "Rx Mission Drive-in/Drop-Off"  will take place from 9 a.m. to 2 p.m. Saturday, March 17, at the Bernards Township Public Works Garage, 277 S. Maple Ave, Basking Ridge. This drop off will allow all Somerset County residents to safely dispose of unwanted or outdated prescription drugs and over-the-counter medications.

The Rx Mission ...

‘Reefer Madness’ Comes to Chatham Borough Council; Cannabis Advocates Make Pitch for Chatham Marijuana Shop

February 14, 2018

CHATHAM, NJ - A group of pro-cannabis activists came to the Borough of Chatham Council meeting on Monday night and used the public commentary portion of the meeting to ask the council to support a marijuana dispensary in town.

The advocates, who say they have attended more than 80 town meetings to inform about the benefits of medical cannabis, mentioned the 1936 movie "Reefer ...

Local Advisor Celebrates the 20th Anniversary of the Roth IRA

February 23, 2018

BASKING RIDGE, NJ - 2018 marks the 20th anniversary of the Roth IRA. First made available to American investors in 1998, a Roth IRA is an individual retirement account that is funded with after-tax dollars and provides tax-free growth and income for retirement.

In honor of this significant milestone, Walter Pardo, CEO/Certified Wealth Strategist at Wealth ...

Upcoming Events

Fri, February 23

Scherman Hoffman Wildlife Sanctuary, Bernardsville

NJ Audubon: Volunteer Art Show!

Arts & Entertainment Green

Fri, February 23, 9:00 AM

The Center for Contemporary Art , Bedminster,

Dan Bischoff: Critic As Artist

Arts & Entertainment

Fri, February 23, 9:00 AM

The Center for Contemporary Art, Bedminster

Keepers of the Chroma: An Exhibition Regarding ...

Arts & Entertainment

Somerset County High School Democrats to Participate in National March for Our Lives Against Gun Violence

February 23, 2018

BRIDGEWATER, NJ - The Somerset County High School Democrats will have members participating in the National School Walkout March 14 and the national March for Our Lives March 24 in Washington D.C., in support of the national movement generated by the survivors of the high school shooting in Parkland, Florida, according to a release.

The organization has called on county, state and federal ...

AtlantiCast

AtlantiCast: Episode 12

On this week’s episode of AtlantiCast, decade of excellence makes headlines, as Atlantic Health’s place on Fortune Magazine’s 100 Best Companies to Work For List leads off the newest episode of AtlantiCast. Also on this week’s show, check out the newest “hybrid” operating room at Morristown Medical Center and find out how Atlantic Health is helping local ...

AtlantiCast Medical Minute: Atlantic Orthopedic Institute’s Scoliosis and Spinal Deformity Center

On this episode of the AtlantiCast Medical Minute, we’ll take you inside the Atlantic Orthopedic Institute’s Scoliosis and Spinal Deformity Center, with the center’s director, Jason Lowenstein, MD.

Video Link: https://www.youtube.com/watch?v=1M7euCp86-c