The U.S. has so much crude that it is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months.

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Joe discusses how couples should file taxes.

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The Markets

Equities markets were mildly buoyed by Federal Reserve Chair Janet Yellen’s congressional testimony and the grudging approval of Greece’s plans for qualifying for additional assistance. The S&P 500 and Russell 2000 hit new record highs during the week. However, both had backed away from those highs by week’s end after U.S. economic growth was shown to be weaker than expected.

Last Week’s Headlines

• In her semiannual testimony before Congress, Federal Chair Janet Yellen continued to lay the groundwork for a rate increase later this year without spelling out when that might happen. Emphasizing continued domestic economic progress, she said that even once language about “patience” disappears from Fed statements, a rate increase would likely not occur for at least two meetings. If that language change occurred at the March meeting, that would mean an increase would be unlikely before June.
• Two of Greece’s key creditors essentially told the financially stressed country to “put up or shut up.” The heads of the International Monetary Fund and the European Central Bank expressed skepticism about whether Greece would follow through on reforms proposed as part of a deal to obtain a four-month extension of the country’s current bailout agreement. The IMF said current descriptions of how taxes, pensions, privatization of key assets, and trade policies would be overhauled lacked a “clear commitment” to details about implementation.
• U.S. economic growth in Q4 2014 was less robust than initially thought. The Bureau of Economic Analysis revised its estimate of gross domestic product downward from 2.6% to 2.2%, primarily because imports were higher and private inventory investment was less than in previous estimates.
• A 0.1% increase in home prices in December contributed to a 4.5% year-over-year gain in the S&P/Case-Shiller 20-City Composite Index. The western half of the country saw the strongest gains, while the Midwest and Northeast lagged.
• Sales of existing homes in January slumped 4.9% to their lowest level in nine months, but the National Association of Realtors® said they were still 3.2% higher than last January. Meanwhile, the Commerce Department said new-home sales slumped 0.2% during the month.
• Lower gas prices helped cut consumer inflation by 0.7% in January, according to the Bureau of Labor Statistics. That’s the biggest monthly decline since 2008, and left the annual inflation rate for the past 12 months at -0.1%.
• Durable goods orders were up 2.8% in January; according to the Commerce Department, that was the biggest monthly increase since last July. New orders for nondefense capital equipment saw a slight 0.6% gain.
• Rate cuts rather than increases were announced by China’s central bank over the weekend. The People’s Bank of China cut its benchmark one-year lending and deposit rates to 5.35% and 2.5% less than four months after previous cuts in November. The quarter-point cuts are a fresh attempt to stimulate a slowing economy.
• The Federal Communications Commission voted to regulate Internet service as a public utility, much as telephone service is regulated. The decision will enable the commission to enforce so-called “net neutrality” and prevent service providers from charging for priority access or interfering with traffic. However, telecom and cable companies are expected to challenge the decision in court.

Eye on the Week Ahead

In a data-heavy week, Friday’s unemployment figure will be of interest. Also, the European Central Bank will meet on Thursday to discuss its bond-buying efforts.

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All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.   Prepared by Broadridge Investor Communication Solutions, Inc. 2015.

As inveterate watchers of sitcom reruns (and a real-life Felix/Oscar combination), my sister and I loved The Odd Couple while we were growing up. One of our favorite episodes featured a courtroom sequence in which Felix (Tony Randall) berates a witness to “never assume,” and proceeds to use the chalkboard to demonstrate what happens when you do. More years later than I care to admit, the mere mention of the word “assume” makes me smile.

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The Markets Reprieve relief: Even a temporary agreement about Greek debt helped equities edge upward. Friday’s relief rally gave the S&P 500 its third straight week of gains, though the Nasdaq continued to lead the pack. Meanwhile, as oil prices remained relatively stable at roughly $50 a barrel, the benchmark 10-year Treasury yield rose.

Last Week’s Headlines

• The eurozone’s finance ministers agreed to a four-month extension of Greece’s current bailout, but gave Greece the weekend to produce a menu of proposed budget cuts and other economic reforms. Those proposals will be reviewed by the so-called troika that oversees the bailout (the European Commission, the International Monetary Fund, and the European Central Bank).
• Manufacturing data was mixed. According to the Federal Reserve, industrial production rose 0.2% in January and increased at an annual rate of 4.3% in Q4. However, both the Empire State and Philly Fed manufacturing surveys showed growth slowing slightly in February.
• Minutes of the most recent meeting of the Federal Reserve’s monetary policy committee showed the Fed is trying to balance international economic weakness with slow but steady domestic growth. It was the first time in nearly two years that the official statement about the meeting had mentioned problems abroad as a factor in any rate increase decision.
• A 6.7% cutback in construction of single-family homes led to a 2% decline in housing starts in January, according to the Commerce Department. However, housing starts were still 18.7% higher than a year earlier.
• Wholesale prices plummeted 0.8% in January, largely because of the 10.3% drop in energy costs. The Bureau of Labor Statistics said the decline in the wholesale inflation rate was its single biggest monthly drop since November 2009. That left the Producer Price Index roughly where it was 12 months ago.

Eye on the Week Ahead

With creditors scheduled to begin to review proposals for Greek budgetary reform, investors will watch to see how the country’s leaders attempt to navigate a tightrope between the anti-austerity sentiment that brought them to power and the eurozone’s demands. Housing data and revised numbers on U.S. Q4 economic growth also are due.

Questions?  We are here to help.

See our Disclosures.

All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.  Prepared by Broadridge Investor Communication Solutions, Inc. 2015.