Statistic of the Week:
The term “artificial intelligence” is not particularly new; it was first used about 60 years ago. Artificial intelligence startups have raised approximately $2 billion in funding through 2016. Experts estimate that robots could potentially “steal” as many as 38% of American jobs by 2030.
With the start of the new year, China has implemented new trade measures. All ivory sales have been banned as have imports of “low-grade waste for recycling.” The news is not so positive for donkeys. China cut tariffs on the import of the animals’ hides as they are an ingredient in traditional Chinese medicine.
Market Moving Events:
Monday: Consumer Credit Tuesday: JOLTS Wednesday: Import Export Prices, Wholesale Trade, Petroleum Status Report Thursday: Jobless Claims, Producer Price Index Friday: Consumer Price Index, Retail Sales, Business Inventories
The US equity markets started the year off on a positive note, with all three major indices posting strong weekly (and in this case, year-to-date) gains. The DJIA rose 2.4%, the S&P 500 rallied 2.6%, and the NASDAQ surged just under 3.5%.1 Some investors were particularly pleased to see the DJIA move past the milestone level of 25,000.2 International markets have put in equally strong moves, with the MSCI EAFE mirroring the movement of the Dow, up 2.4%.3 Fixed income markets across the globe retreated. The yield on the 10-year Treasury rose 4 basis points to 2.48%.4 Yields in both the UK and Germany inched higher as well.5 One of the surprising stories for the start of the year has been the strength of the oil markets. While we would expect to see commodities in general rally during a synchronized global expansion, the recovery in oil has been notable. West Texas futures reached a three-year high as the US Energy Information Administration reported that supplies fell more than expected.6 Tensions in Iran helped push the price of Brent crude over $68 / barrel.7 While the fundamentals of the economy looks strong, last week’s job data (chart right) was disappointing and warrants watching. The economy added 148,000 jobs last month, below analyst expectations.8 Earnings growth also slowed to an annual rate of 2.5%.9 A healthy consumer is necessary for the US economy to continue along its path of expansion. - Dan McElwee, CFP®
Chart of the Week: