Last week Janet Yellen announced that interest rates are going to go up sometime later in the year. We believe a rate hike in June is very unlikely but a possibility in September. Remember though that there is a lot of data that will come between now and then which is why we are here every day tracking it. More in the Video.
Although the news media is not reporting on the rising level of corporate debt, it continues to be something we are watching very closely. New corporate debt tells us that companies are being more active by borrowing money to expand their business. This has a rippling effect in the economy and is leading consumers to be more confident to borrow money themselves. With interest rates so low, this could be a possible market tailwind. More in the video.
Last week was another good week for the markets both domestically and internationally. Economic data in retail sales and durable goods orders beat expectations and we are continuing to see an increase in consumer spending. This week investors should watch several pieces of new economic data that could impact their portfolios.
We saw volatility in the markets last week as U.S. industrial production declined and the manufacturing index turned negative. All eyes continue to be on Greece for a possible default. There was some good news as oil prices rebounded sharply and US retail sales saw solid gains in March. The average number of jobs rose, but wage numbers are not following. More in the video.