A continued possibility of rising inflation may be responsible for some of the overall lack of direction in the market. The Federal Reserve Board’s release of minutes from a March meeting of the Federal Open Market Committee said the “predominant policy concern” is that future inflation won’t moderate. For the week, the S&P 500 Index rose 0.6% to 1,453, and the yield of the 10-year U.S. Treasury note rose 1 basis point to 4.76%.

Producer prices are up with the Producer Price Index (PPI) rising 1% over the last month. This is the 4th large increase in the past 5 months and is largely due to increased food and energy costs.

The trade gap however, continues to narrow and has narrowed for every month since August 2006 with the exception of December. Many analysts had expected the gap to widen in February. The gap was a record 68.9 billion dollars in August of last year but was 54.8 billion in February.

In the week ahead we look forward to a Consumer Price Index update on Tuesday as well as updates on industrial production and residential construction that same day.  On Thursday the Conference Board will release a report on leading economic indicators.