Financial News for the Week Ending February 1st
US Stocks ended the week down on concerns over emerging markets and global growth. The Dow sank 1.1% and the S&P 500 fell 0.4% for the week. For January, US stocks dropped -3.2%. Internationally, Europe was down 0.7% and Japan sank 3.1% for the week. International markets overall were down 4.5% with emerging markets plunging 8.6% in January driven initially by a reading of slowing growth in China. Investors moved to Treasuries as a safe haven and the 10 year Treasury yield sank to 2.67%, down substantially from the 3.0% level where it started the year.
Durable good orders dropped 4.3% in December from November showing caution from businesses. However, overall for 2013 durable good orders showed improvement.
Several emerging market countries including Turkey, South Africa, and Argentina have seen their currencies come under pressure due to new weak economic readings from China and the Fed’s pullback in stimulus.
The Fed announced at the conclusion of its most recent policy meeting that it would continue its measured cutbacks of its bond buying program reducing by $10 billion to $65 billion the purchases it will make in February. The move was made given their belief of the strength of the US economy and despite recent turbulence seen in emerging markets. Officials also suggested they would continue reducing the purchases in $10 billion increments.
The US economy rose 3.2% in the fourth quarter in the first reading of GDP released. The main drivers were consumer spending and business investment.
The euro zone inflation rate weakened in January to 0.7% well below the 2% target of the ECB and increasing fears of the potential for debilitating price declines that could threaten the regions rebound.
Personal income growth rose just 0.7% in 2013 raising concerns about the ability of consumers to drive future economic growth.
Apple’s iPhone sales rose 7% in its most recent quarter, but the number fell short of expectations. The company also said that revenue could potentially decline in the current quarter.
AT&T, Ford, Facebook, and Google posted positive earnings reports for the fourth quarter. On the other hand Yahoo, Exxon, Amazon, Chevron and Mattel all posted disappointing results.
Google agreed to sell its Motorola unit to Chinese computer maker Lenovo for $2.9 billion after owning the company for just 22 months. Google did retain a valuable group of patents however.
Reposted from the Raffa Wealth Management Blog.
All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC