For the majority of the session, the major equity indices have managed to hold steady in positive territory although, as we’ve seen earlier in the week, all that could change at any moment. Despite the crazy swings we’ve experienced over the last week, all the indices will actually close out the week much higher than where they opened Monday morning. The NASDAQ in particular is not far off from popping back above the 5,000-level again. General Electric (GE) is leading the Dow higher today after announcing this morning that it would be restructuring the company, exiting the banking sector, and paying out money to shareholders. Additionally, Apple (AAPL) made a sizable reversal this morning; Apple Watch sales completely blew away expectations, selling out within 6 hours of going on sale and the $20,000-gold watch selling out in China in less than an hour. Quite a crazy market indeed! It’s interesting that the market remains rather quiet heading into the first major week of Q1-2015 earnings season.

Like the majority of the week, economic data was relatively light domestically, save for one: the March report on import and export prices. It’s quite clear that the doves in the Federal Reserve can be a bit more persuasive after today’s import-export price report notes that there aren’t any signs of inflationary pressures. For the month of March, import prices declined by 0.3% with the key reading excluding petroleum-related prices down by 0.4%. On a year-over-year basis, import prices have declined for the eighth month in a row at a huge -10.5% overall and -2.7% excluding petroleum. We note that these year-over-year declines are the steepest declines since late 2009. The stronger US dollar is not only pulling down foreign demand for US exports, but also pulling down the prices of foreign imports. However, this is not an issue on the export side where deflationary forces are also apparent. In March, export prices edged about 0.1% higher for the month, but are down 6.7% year-over-year for the seventh straight monthly decline. Looking at the prices of finished goods, there are declines among all imported products, with motor vehicle imports showing the greatest contraction, at -0.3% for March and -1.8%, year over year. The Fed’s two policy targets, inflation and employment, are both clearly soft after March’s jobs report and today’s import-export data.  So far, the Fed’s rate hike timing is not impacted by this report, but next week’s readings for the producer price index (PPI) and consumer price index (CPI) might be enough to get the hawks to reconsider.