In recent weeks I find myself day dreaming about market data whenever I start having the obligatory weather conversation with an acquaintance.  I’m not trying to be rude, but it seems that much of our current economic data has been impacted by the recent stretch of bad weather we’ve experienced… Let me explain, because now I sound like a jerk.

US PMI Data was mixed, US manufacturing PMI fell from 56.5 in December to 51.3 in January (over 50 reflects expansion). While Manufacturing hit a tremendous bump in the road (attributed to weather, the government shutdown, and depleting inventories from a 3^rd quarter build up), Non-manufacturing PMI (services sector) increased from 53.0 in December to 54.0 in January.

Payroll Data in the US, while an improvement over December, 75K jobs added, came in at just 113K jobs added; originally estimated to be 194K[1].  Weather should not be attributed to this, as the week that households were surveyed didn’t have any weather distractions nationally[2].  While the job gains were meager the unemployment rate still fell to 6.6%.  Sometimes we can point to a decrease in labor force participation as a contributor to the unemployment rate falling; however in the January the labor force participation increased by over 500K[3].  This could very well be a sign of improving sentiment about the job market.

2014 economic growth in the US given the recent wave of data would point to continued sluggish expansion.  Nothing anyone wants to hear, but realistic none the less.  Truly this prevents an overheating of our economy.  The worry becomes is the economy running warm enough to even stay heated.  The answer at this point is yes and the Federal Reserve Board (FRB) has made it extremely clear that they will take the measures necessary to keep the economy moving forward.

Many have pointed to the impact emerging markets have had on the recent soft patch in the market, including myself.  Opportunity still exists in this market save for a few countries that have mishandled the excessive flows that they had the benefit of.

On a brighter note, over the last week positive economic data has continued to flow regarding the Eurozone. EU composite PMI increased from 52.1 in December to 52.9 in January, which included improving PMI data for Germany, Greece (above 50), Spain, and France (still contractionary, but improving)[4].

If you would like an in-depth analysis of your current positions and allocation, please feel free to call Jason Roque at 719-313-7536 to schedule an appointment.

Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services.  Broad diversification across several asset classes with a long term holding strategy is the best strategy in any market environment.  Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.