MARKET WATCH: March 15, 2021

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Consumer prices increased 0.4% in February and have risen 1.7% over the last 12 months ended in February. Gasoline prices, which rose 6.4% last month, were a major contributor to the overall increase in prices. Food prices and shelter prices each inched up 0.2%. Prices for new vehicles were unchanged in February, although prices for used cars and trucks fell 0.9%. Consumer prices less food and energy crept ahead 0.1% in February and 1.3% over the last 12 months.

• Producer prices are advancing at a faster rate than prices at the consumer level. The Producer Price Index advanced 0.5% in February after climbing 1.3% in January. Over the 12 months ended in February, producer prices have increased 2.8%, the largest 12-month increase since rising 3.1% for the 12 months ended in October 2018. Prices for goods rose 1.4% in February, mostly driven by higher energy prices, which rose 6.0%. Nevertheless, producer prices less foods, energy, and trade services moved up 0.2% in February and have risen 2.2% over the 12 months ended in February. Producer prices for services inched up 0.1% last month.

• The February budget deficit was $310.9 billion, about 32% higher than the February 2020 budget deficit. Through the first five months of the fiscal year, the budget deficit is $1.05 billion, a 68% increase over the same period last fiscal year. Government outlays in February were $569.2 billion, 32% larger than outlays in February 2020. Receipts totaled $248.3 billion, also 32% greater than February 2020 receipts. Compared to the same period last fiscal year, outlays for income security for the current year are up 125%, commerce and housing credit increased 859%, and outlays for health increased 26%. Individual income tax receipts are up 5%, and corporate income taxes have increased 21%.

• In January, the number of job openings increased by about 150,000, the number of hires fell by nearly 100,000, and the number of separations dropped by 275,000, according to the latest Job Openings and Labor Turnover Summary. Job openings increased in state and local government education (56,000), educational services (21,000), and mining and logging (10,000). Hires increased in arts, entertainment, and recreation (59,000) and in educational services (25,000). Hires decreased in federal government (15,000). The number of layoffs and discharges decreased in accommodation and food services (209,000). The number of layoffs and discharges increased in transportation, warehousing, and utilities (113,000) and in federal government (5,000). Over the 12 months ended in January, hires totaled 72.4 million and separations totaled 81.2 million, yielding a net employment loss of 8.8 million.

• For the week ended March 6, there were 712,000 new claims for unemployment insurance, a decrease of 42,000 from the previous week’s level, which was revised up by 9,000. According to the Department of Labor, the advance rate for insured unemployment claims was 2.9% for the week ended February 27, a decrease of 0.2 percentage point from the previous week’s rate. For comparison, during the same period last year, there were 211,000 initial claims for unemployment insurance, and the insured unemployment claims rate was 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended February 27 was 4,144,000, a decrease of 193,000 from the prior week’s level, which was revised up by 42,000. States and territories with the highest insured unemployment rates in the week ended February 20 were in Pennsylvania (6.2%), Alaska (5.9%), Nevada (5.5%), Connecticut (5.4%), Massachusetts (5.1%), New York (4.9%), Rhode Island (4.9%), the Virgin Islands (4.7%), California (4.5%), and Illinois (4.5%). The largest increases in initial claims for the week ended February 27 were in Texas (+19,897), Ohio (+18,644), New York (+12,316), Mississippi (+8,324), and West Virginia (+4,998), while the largest decreases were in Missouri (-9,878), Wisconsin (-2,940), Michigan (-2,879), Rhode Island (-2,473), and Minnesota (-2,003).

Eye on the Week Ahead

The Federal Open Market Committee meets this week. For the past several weeks, Committee Chair Jerome Powell and various Committee governors have indicated they have no intention of raising interest rates or scaling back accommodative measures already in place. Nevertheless, much attention will be paid to the announcement following this meeting to get a better gauge of actions to be taken by the Committee in the near term and over the mid-term.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuate with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.