The Market Week In Review - Friday, Jan. 3

The U.S. stock market started the week mostly higher due to an announcement that China’s central bank will cut the minimum reserves for commercial banks but ended the week marginally lower amid news that Iranian General Qassem Soleimani was killed in a U.S. airstrike. Consequent to the U.S. airstrike news, interest rates also fell with the 10-year Treasury yield dropping from 1.87% last week to 1.78% today. The price of gold jumped 2.4% on the news to $1,555 an ounce while the price of crude oil (Iran’s main export) jumped 3.0% to $63.04 a barrel.

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This Week's Economic Highlights

• Initial unemployment claims fell by 2,000 to 222,000 for the week ending December 28th. Meanwhile, the more stable four-week moving average of initial claims rose by 4,750 to 233,250 amid the spike in claims three weeks prior. Continuing unemployment claims, which lags initial claims by a week, was little changed as it rose only 5,000 to 1.73 million.
• The ISM manufacturing index continues to fall as it drops from 48.1% in November to 47.2% in December, marking it the fifth consecutive contraction and weakest reading in over 10 years. Readings below 50% indicate that the majority of companies in the manufacturing sector are contracting instead of expanding.
•  The minutes from the Federal Reserve Open Market Committee (FOMC) meeting in December showed that officials were optimistic about the U.S. economy as trade tensions with China eased. However, many officials still remain worried that U.S. inflation will remain too low in light of a slowing global economy. At the December meeting, the FOMC unanimously voted to leave the target rate range unchanged at 1.50% to 1.75%.