U.S. and World News
- President Trump released a detailed outline of his long-awaited infrastructure proposal. The major aspects of the proposal are similar to the framework that had been leaked a few weeks ago. The overall amount of federal funding for the proposal would be $200 billion and this would be combined with private funding for a total package of $1.5 trillion spread over several years. There are four broad segments addressed in the proposal: Infrastructure Incentives Program (transportation, water/sewer), Rural Infrastructure Program (broadband, electrical power), Transformative Projects Program (commercially viable projects with high risk/reward), and Infrastructure Financing Programs (additional funding and broader eligibility). In addition, President Trump is calling for a $0.25/gallon hike to the federal gas tax in order to fund the federal portion that will upgrade roads, bridges and public works. The proposal faces strong challenges before it can be enacted due to the 60 votes needed to pass it in the Senate and a current lack of bipartisan consensus about the appropriate structure for federal infrastructure funds.
- Markets rebounded from last week’s plunge, although trading was still relatively volatile. The S&P 500 gained 4.37% and closed at 2,732. The Dow Jones followed suit by also gaining 4.36% and closing at 25,219. Year to date, the S&P is up 2.45% and the Dow Jones has gained 2.37%.
- Yields continued their upward trend this week, the 5 year and 10 year U.S. Treasury Notes are now yielding 2.64% and 2.88%, respectively.
- The spot price of WTI Crude Oil rose 4.04% this week, closing at $61.61 per barrel. Year to date, Oil prices are up 3.11%.
- The spot price of Gold increased by 2.30% this week, closing at $1,346.96 per ounce. Year to date, Gold prices are up 3.39%.
- Initial jobless claims increase 7,000 from last week, coming in at 230,000, a bit above consensus estimates of a slight increase. The four week moving average for claims now stands at 229,000.
- The headline Consumer Price Index (inflation) reading for January increased 0.5%, over expectations of 0.3%. This reflected a 3.0% rise in energy prices. Over the last 12 months, headline prices have risen 2.1%.
- Core CPI (excludes food and energy) came in at 0.35%, also higher than expectations of 0.2%. Over the last 12 months, Core inflation has been 1.85%.
- Retail sales declined -0.3% in January, a disappointing figure compared to +0.2% expectations. Excluding autos, retail sales were flat, also below expectations. The largest declines in January were in health and personal care (-1.2%), sporting goods, hobby, book and music (-0.8%), and furniture (-0.4%) retailers.
Fact of the Week
- The National Retail Federation estimates that more than 55% of the U.S. population celebrated Valentine’s Day this week, and will have spent $19.6 billion on gifts for the holiday.
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