The major equity indices have remained substantially in the red so far during today’s session. The NASDAQ traded in the green for most of the morning as it is heavily weighted with shares of Apple (AAPL), which thanks to a series of positive news, caused the stock to reach new all-time highs. While the other indices remain around breakeven year to date, the NASDAQ has surpassed all expectations and is up over 1.0% year-to-date. Crude inventories showed yet another build for the week, increasing by 4.9 million barrels compared to 6.3 million barrels a week ago. Oil inventories now show 5 straight weeks of large builds. Refineries slowed production of gasoline in the week; however inventories still increased, up 2.0 million barrels and above the upper limit of their average range. As such, the price of oil dropped back below the $50-level and dragged down the market once again. Wednesday is a light day for economic releases, but there were a couple data points worth sharing.

Economically, the most compelling international data was out of Brazil, which noted substantial weakness among its consumers. Retail sales declined by 2.6% month-over-month in December, which was the sharpest decline on record (since the Brazilian government began reporting this data in 2000). This reading made 2014 the weakest year for retail sales since 2003, which was brought about by a disappointing Christmas shopping season. For 2014, retail sales increased 2.2% year-over-year, but this was still the slowest pace in 11 years and far below the average growth rate of 7.5% for the previous 4 years. We noted that weak consumption is the clearest sign of malaise now facing the Brazilian economy. Consumer confidence has fallen to the lowest levels since 2005, while wage growth has slowed and job creation has fizzled out. Economists cite the slowdown in retail sales as the culprit behind Brazil’s stagnant growth last year, and they warn that activity will likely worsen in 2015 thanks to a series of tax and interest rate hikes. The summer Olympics are set to take place in Brazil in 2016, but so far, the country is missing the mark for setting itself up for success.

Domestically, the Mortgage Bankers’ Association’s (MBA) weekly report showed that mortgage applications were all negative for the week ended February 6^th. The composite index wiped out the prior week’s gain as it fell by 9% week-over-week. This was led by the refinancing applications component index falling 10% week-over-week following a 3% gain in the prior week. The purchasing applications component index continued its decent as the index fell 7% week-over-week after falling 2% in the prior week. Though they did not appear to have a major impact on consumers when falling, rising mortgage rates for conforming loans ($417,000 or less) appear to be the culprits behind the steep decrease in traffic. Rates rose 5 basis points to an average of 3.84%. December and January job reports indicate that the construction sector has many more jobs available than in previous months. However, demand for single-family residential housing needs to increase in order for these jobs to remain available.

NOTE: A CORRECTION FROM MORNING COMMENTARY

There was a notable typo in this morning’s commentary, stating that Mr. Ronald Read was a solider in “WWI” when, in fact, he served during “WWII.” Read graduated from Vermont’s Brattleboro High School in 1940, served in North Africa, Italy, and the Pacific during World War II. At the conclusion of the war, Read returned to Vermont to work at Haviland's service station and took on a second job as a janitor at a JC Penney store. We sincerely apologize for this misprint.