Week in Review

The week that was:

Japan experienced the strongest earthquake to hit the country in over 300 years on Friday.  The Japanese yen rose by the most in at least two weeks against the US dollar and euro on Friday as traders anticipated that Japanese investors and businesses will shift more assets back into the yen after the quake.  Surprisingly enough, the iShares MSCI Japan Index ETF (EWJ) was only down 1.66% on Friday.  I anticipate that it will open much lower on Monday morning after the market has had all weekend to assess the full extent of the damage.  I will be looking to buy EWJ in the $7-8 range as I think the index will rebound in the long-run.

Other current downside risks in the market include high oil prices and the possibility of a supply disruption due to the conflicts in the Middle East, recurring problems in the European sovereign debt markets, domestic fiscal issues, and inflation concerns.

Stocks:

The S&P 500 fell 16.87 points this week, or 1.28%, to 1304.28.  The Nasdaq Composite fell 69.06 points, or 2.48%, to 2715.61.  The Dow Industrials fell 125.48 points, or 1.03%, to 12044.40.  This marks the biggest weekly point and percentage drop for the Nasdaq since August 13, 2010.

Bonds:

End of week bond yields:

3 Month yield = 0.05%, down 5 bps from last week.

2 Year yield = 0.64%, down 4 bps from last week.

3 Year yield = 1.00%, down 18 bps from last week.

5 Year yield = 2.05%, down 13 bps from last week.

10 Year yield = 3.40%, down 9 bps from last week.

30 Year yield = 4.55%, down 5 bps from last week.

What to look for next week:

1:15 PM          Tuesday           FOMC Meeting Announcement

7:30 AM          Wednesday     Housing Starts

7:30 AM          Wednesday     Producer Price Index

7:30 AM          Thursday         Consumer Price Index

7:30 AM          Thursday         Jobless Claims

8:15 AM          Thursday         Industrial Production

9:00 AM          Thursday         Philadelphia Fed Survey