economic snapshot march 23, 2015

2
Suite 3535, 30 East 7 th Street, St. Paul, MN 55101 PHONE: (651) 829-3300 FAX: (651) 839-3301 WEB: highmarkwealth.com Jobs Inflation The Consumer Price Index increased 0.4% in May. The Producer Price Index had the largest increase since January 2010, closing at 0.6% in April (+2.1% y/y). Import prices decreased at a faster rate than expected, which could moderate inflation expectations goiasdfasdfasdfafdasdfasdfasdfng forward. Rates Growth The Commerce Department noted whaolesale trade increased 0.7% in May 2014. The Federal Reserve posted consumer credit increased at an annasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfual rate of 7.5% in May, impacted by non-revolving credit. Profits The second quarter earnings seasaasdfasdfaasdfasdfasfon started with the S&P 500 operating earnings The Labor Department reported initial jobless claims rose by 1,000 to 291,000 in the week ending March 15, 2015. The four-week moving average was 304,750. The February employment report stated nonfarm payrolls rose by 295,000 and the U.S. unemployment rate dropped by 0.2% to 5.5%. Over the year, the unemployment rate and the number of unemployed persons (8.7 million) dropped by 1.2% and 1.7 million in February. Core CPI inflation was flat for the second month in a row at 1.6% year-over-year. Headline consumer prices slipped -0.7% between Dec. and Jan., and are currently down 0.2% year-over-year. Headline inflation slipped largely due to a drop in gasoline and energy prices. Final demand producer inflation dropped further in February (-0.7% year-over-year), with weakness coming from the previous 10.3% slip in energy prices. Further illustrating deflationary pressures, import prices dropped 2.5% month-over- month impacted by a stronger dollar and falling energy prices. The 10-year U.S. Treasury Note yield dropped 0.2% to 1.93% for the week ending March 20, 2015. There were no policy changes in the FOMC’s March statement, but it opened the opportunity for a rate increase this year by removing the word “patient.” The Fed stressed a rate increase would only happen after more improvement in the labor market and when the Committee had “reasonable confidence” inflation would hit 2% in the medium term. Economic Snapshot March 23, 2015 The Commerce Department reported housing starts fell 17.0% in February. The Fed noted industrial production rose 0.1% in February. The second estimate of 4Q 2014 real GDP put growth at 2.2% q/q saar, under the first estimate of 2.6%. A drop in government spending and increasing trade deficit lowered 4Q GDP growth from 5.0% in 3Q 2014. The US had the strongest rise in personal consumption since 1Q 2006 with a rise of 4.2%, reflecting a rise in spending on nondurable goods and services. According to the S&P Dow Jones Indices, as of March 12, 2015, of the 497 S&P 500 Index companies reporting 4Q earnings, 343- beat analysts’ estimates. The S&P 500 operating earnings are estimated to be $26.67 for 4Q, representing a -5.6% year-over- year growth. Lower earnings were primarily due to low oil prices, pension write-offs and a strong dollar. Jobs Inflation Rates Growth Profits

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The Commerce Department reported housing starts fell 17.0% in February. The Fed noted industrial production rose 0.1% in February. The second estimate of 4Q 2014 real GDP put growth at 2.2% q/q saar, under the first estimate of 2.6%.

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Page 1: Economic snapshot march 23, 2015

Suite 3535, 30 East 7th

Street, St. Paul, MN 55101 PHONE: (651) 829-3300 FAX: (651) 839-3301 WEB: highmarkwealth.com

Jobs

The Labor Department reported the U.S. job market added 288,000 jobs and the unemployment rate dropped to 6.1% in June from 6.3% in May. Initial jobless claims dccreased by 11,000 to 304,000. The Labor Department reported the four week sadkfasdfasdfasdfasdfasdfasdfasdfamoving average was 311,500.

Inflation

The Consumer Price Index increased 0.4% in May. The Producer Price Index had the largest increase since January 2010, closing at 0.6% in April (+2.1% y/y). Import prices decreased at a faster rate than expected, which could moderate inflation expectations goiasdfasdfasdfafdasdfasdfasdfng forward.

Rates

The yield on the 10-year U.S. Treasury note dropped. The Federal Open Market Committee announced bond purchases have dropped to $asdfasdf35 billion from $45 billion. Monthly mortgage-backed securities purchases will drop to $15 billion from $20 billion. The European Central Bank voted to keep the

Growth

The Commerce Department noted whaolesale trade increased 0.7% in May 2014. The Federal Reserve posted consumer credit increased at an annasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfasdfual rate of 7.5% in May, impacted by non-revolving credit.

Profits

The second quarter earnings seasaasdfasdfaasdfasdfasfon started with the S&P 500 operating earnings on target to be $29.24, which embodies a 10.9a% year-over-year growth increase. According to S&P Dow Jones Indices divided net increases for U.S. domestic common stock increased $12.6 billion in second

The Labor Department reported initial jobless claims rose by 1,000 to 291,000 in the

week ending March 15, 2015. The four-week moving average was 304,750. The February

employment report stated nonfarm payrolls rose by 295,000 and the U.S. unemployment

rate dropped by 0.2% to 5.5%. Over the year, the unemployment rate and the number of

unemployed persons (8.7 million) dropped by 1.2% and 1.7 million in February.

Core CPI inflation was flat for the second month in a row at 1.6% year-over-year. Headline consumer prices slipped -0.7% between Dec. and Jan., and are currently down 0.2% year-over-year. Headline inflation slipped largely due to a drop in gasoline and energy prices. Final demand producer inflation dropped further in February (-0.7% year-over-year), with weakness coming from the previous 10.3% slip in energy prices. Further illustrating deflationary pressures, import prices dropped 2.5% month-over-month impacted by a stronger dollar and falling energy prices.

The 10-year U.S. Treasury Note yield dropped 0.2% to 1.93% for the week ending March

20, 2015. There were no policy changes in the FOMC’s March statement, but it opened

the opportunity for a rate increase this year by removing the word “patient.” The Fed

stressed a rate increase would only happen after more improvement in the labor market

and when the Committee had “reasonable confidence” inflation would hit 2% in the

medium term.

Economic Snapshot March 23, 2015

The Commerce Department reported housing starts fell 17.0% in February. The Fed

noted industrial production rose 0.1% in February. The second estimate of 4Q 2014 real

GDP put growth at 2.2% q/q saar, under the first estimate of 2.6%. A drop in

government spending and increasing trade deficit lowered 4Q GDP growth from 5.0%

in 3Q 2014. The US had the strongest rise in personal consumption since 1Q 2006 with

a rise of 4.2%, reflecting a rise in spending on nondurable goods and services.

According to the S&P Dow Jones Indices, as of March 12, 2015, of the 497 S&P 500

Index companies reporting 4Q earnings, 343- beat analysts’ estimates. The S&P 500

operating earnings are estimated to be $26.67 for 4Q, representing a -5.6% year-over-

year growth. Lower earnings were primarily due to low oil prices, pension write-offs

and a strong dollar.

Past performance does not guarantee future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Opinions offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. The views expressed are those of HighMark Wealth Management. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. HighMark Wealth Management, LLC, is a member of FINRA/SIPC. HighMark Wealth Management is the marketing name for the asset management businesses of HighMark Wealth Management. Those businesses include, but are not limited to, HighMark Wealth Management © HighMark Wealth Management July 2014

Jobs

Inflation

Rates

Growth

Profits

Page 2: Economic snapshot march 23, 2015

Suite 3535, 30 East 7th

Street, St. Paul, MN 55101 PHONE: (651) 829-3300 FAX: (651) 839-3301 WEB: highmarkwealth.com

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