Weekly Economic Update
Posted: May 14, 2018
Oil Hits a 4-Year Peak
The price of WTI crude settled at $71.36 on Thursday, hours after Bank of America Merrill Lynch analysts forecast $90 oil by spring 2019 and a “risk of $100 a barrel” Brent crude next year. Thursday’s close was oil’s highest settlement since November 2014. Futures rallied 1.4% on the week after the Trump administration said that the U.S. would exit the Iran nuclear deal and reinstate sanctions against that OPEC member. That implies reduced global oil supply. As of Friday evening, no other OPEC country had committed to produce more oil in response. WTI crude closed at $70.70 on the NYMEX on Friday.1
Consumer Sentiment Holds Steady
At a mark of 98.8, the University of Michigan’s initial May consumer sentiment index was unchanged from its final April reading. At this time in 2017, the index was at 97.1.2
Inflation Pressure Moderates
In April, the Consumer Price Index rose 0.2%, while the core CPI ticked up just 0.1%. This left annualized inflation unchanged at 2.5%, while yearly core inflation fell 0.1% to 2.1%. Thanks to a mere 0.1% April gain in the Producer Price Index, wholesale inflation rose 2.6% in the 12 months ending in April, down from 3.0% in the year ending in March.3
Big Gains For Equity Benchmarks
The S&P 500 advanced 2.41% in five days to a Friday settlement of 2,727.72. Meanwhile, a 2.68% rise took the Nasdaq Composite north to 7,402.88, and the Dow Jones Industrial Average added 2.34% to reach 24,831.17. The Russell 2000 finished the week 2.63% higher at 1,606.79.4
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1 - marketwatch.com/story/us-oil-prices-hover-at-3-12-year-highs-as-analysts-entertain-the-idea-of-100-crude-2018-05-11 [5/11/18]
2 - sca.isr.umich.edu/ [5/11/18]
3 - investing.com/economic-calendar/ [5/11/18]
4 - markets.wsj.com/us [5/11/18]