Weekly Market
Review
02/25/08
Fears of slowing growth
and rising inflation returned last week. On the same day the Fed was
reducing its high-end estimate of the economy’s growth for 2008 to a gain of
just +2.0%, the government was also reporting trailing 12-month inflation of
+4.3%. The combination of slowing growth (which would suggest a rate cut
from the Fed is needed) and rising inflation (which calls for an interest
rate hike by the Fed) can place the central bank in an awkward position.
The Fed is hoping their recent rate cuts, coupled with the economic stimulus
package signed into law by the president will limit the severity of the
economic downturn we are experiencing at this time. As the week ended, the
Fed funds futures market was priced to reflect a 94% chance that the Fed
will lower interest rates by ½ of 1% when it meets on March 18th,
a rate cut that would be its 6th since last September (source:
Federal Reserve, FT).
The price of a barrel of
oil closed above $100 for the first time ever last Wednesday, a day after
the president of OPEC said the cartel’s oil production would not be
increased in the near future. Gasoline prices followed the price of oil up,
increasing by an average of 13 cents a gallon nationwide in just the last
week (source: FT, AAA).
Today begins the final
trading week of February. Stock investors are hoping for an up week that
would push the month into a positive return, breaking a string of
3-consecutive down months for the S&P 500 stock index (source: BTN
Research).
Notable Numbers for the
Week:
1.
SOURCE OF PAYMENT
-
45% of all health care expenditures are paid today by government
entities (e.g., Medicare or Medicaid) as opposed to payments made by
private health insurance companies or out-of-pocket payments made
by individuals (source: National Center for Health Statistics).
2. GRAY
HAIRS
- 8,000 Americans are turning 60 years old each day (source: Wall
Street Journal).
3. INTENDED
RESULT?
- More than 70% of the rebate paid to taxpayers from the 2001
economic stimulus plan was used by Americans to augment their savings or pay
off credit card debt (source: Financial Times).
4. AND
IN THE NEXT 10 YEARS
- In the last 30 years (i.e., 1978-2008), the number of automobiles
owned by Chinese citizens has increased by a multiple of 100, rising
from less than 500,000 in 1978 to more than 50 million today (source:
Cambridge Energy Research Associates, Wall Street Journal).
|
Securities offered through
Registered Representatives of NFP Securities, Inc., |
|
a Broker/Dealer and Member
FINRA/SIPC |
|
Investment Advisory Services offered through Investment Advisory
Representatives |
|
of NFP Securities, Inc. a
Federally Registered Investment Advisor |
|
NFP Securities, Inc. is
not affiliated with Barnes and Sherry. |
|
|
|
This site is published
for residents of the United States only. Registered representatives |
|
and investment advisor
representatives of NFP Securities, Inc. may only conduct business |
|
with residents of the
states and jurisdictions in which they are properly registered. |
|
Therefore, a response
to a request for information may be delayed. Not all of the |
|
products and services
referenced on this site are available in every state and through |
|
every representative or
advisor listed for additional information, please contact the NFP |
|
Securities, Inc.
Compliance Department at 512-697-6429. |