Economic Journal - Monday, 4/30/2012

(As of 7:35 am pacific)

US stocks decline to start the week as data shows Spain has entered into a recession.  In the US consumer spending climbed in March after the biggest gain since August 2009.  Household purchases, which account for nearly 70% of the economy, increased 0.3% in March after an upwardly revised 0.9% increase in February.  Incomes increased 0.4%, the most in 3 months, while the savings rate rose slightly to 3.8% from 3.7%.  In Europe, Spain records its second consecutive contractionary quarter, reaching the official definition of a recession.  The Spanish economy contracted 0.3% in the first quarter of 2012, following a 0.3% decline in GDP in the fourth quarter of 2011.  In Germany, German retail sales rebounded in March as unemployment drops, inflation slows, and personal incomes drifted up.  Stocks throughout the region were mostly down.  In Asia, Hong Kong led the way on Monday as the Hang Seng Index rose 1.70% following Friday’s finish on Wall Street which saw stocks rise on strong corporate earnings.   In company news today, Barnes and Noble shares jumped 70% as the bookstore announces a digital-reading technology partnership with Microsoft as the software giant plans to invest over $300 million in the company.  Oil prices dropped 0.75% to 104.10 while gold also was down 0.76% to 1652.20.  US dollar was mostly down and the 10 yr. treasury yield drifted down slightly to 1.92%.  30 yr. mortgage rates remained at 3.82%.  The CBOE volatility index edged up higher, up 6.13% to 17.32.

Economic Journal - Friday, 4/27/2012

(As of 7:21 am pacific)

Stocks drifted up slightly shrugging off economic news and carried by positive earnings reports from Amazon and Ford.   With gains in the early morning session, the S&P is poised to finish its biggest weekly rally in over a month.  After market close yesterday, Amazon reported earnings that far surpassed estimates, sending shares of the online-commerce giant up 14% to start today.  Ford shares drifted down, as the auto maker posted its 12^th consecutive profitable quarter.  The market was earnings driven in April as 75% of the 271 companies in the S&P500 who have reported so far have beat estimates.  In economic news, the Commerce Dept. reported that GDP rose at a 2.2% annualized rate between January and March of this year, slower than the 3.0% pace in Q4 2011 and lower than economists forecasts of 2.5%.  Consumer spending picked up to its fastest pace in over a year, while business spending surprisingly dropped, dragging down the pace of GDP growth.  According to a Thomson Reuters/University of Michigan sentiment index, the final reading of consumer sentiment for April rose to 76.4 from 76.2 last month.  Economists expected the final reading to remain at the preliminary level of 75.7.  In Europe, stocks rose 0.75%.  Spanish bond yields rose the most in almost 2 weeks as Standard and Poors lowered Spain’s credit rating 2 level from A to BBB+.  Asian markets were down to finish the week.  Oil prices were down slightly to 104.53 while gold rose 0.36% to 1666.40.  The US dollar was mixed and 10 yr. treasury yields were flat at 1.94%.  30 yr. mortgage rates remained low at 3.82%.  The volatility index (VIX) was slightly lower to 16.20.  

Economic Journal - Thursday, 4/26/2012

(As of 7:09 am pacific)

Stocks open modestly higher on Thursday as US jobless claims remain near a 2012 high.  Jobless claims fell by 1,000 to 388,000 last week, according to the US Labor Dept.  Claims from 2 weeks ago were revised up to 389,000.  For the third straight week, jobless claims remained elevated, causing concern about the weakening labor market.  The 4 week average for claims, which takes in to account seasonal volatility, drifted higher to 381,750.  The market continues to digest statements made by Fed Chairman Ben Bernanke in yesterday’s press conference.  The outlook remained relatively neutral with Bernanke stating they  are holding to their plan of keeping rates low until 2014.  Investors globbed on to a statement Bernanke made indicating that the central bank would keep monetary policy highly accommodative as the economy continues to grow modestly.  Markets weren’t expecting much, but liked hearing that QE3 was not completely off the table.  In Europe today, stocks traded lower on negative sentiment data that reaffirmed doubts in the euro-area recovery.  The European Commission reported its economic sentiment indicator fell more than expected in April to 92.8, down from 94.5 in the previous month.  The disappointing readings were the lowest since December 2011.  European banks led the retreat on Thursday.  In Asia, stocks gained on company earnings and positive momentum from yesterday’s Wall Street gains.  Oil was up just slightly to 104.13 while gold traded higher, up 0.66% to 1653.  The US dollar was mixed and 10 yr. treasury yields fell 4 basis points to 1.94%.  30 yr. mortgage rates remained near all-time lows at 3.85%.  The VIX was down 7% to 16.82.

Economic Journal - Wednesday, 4/25/2012

(As of 7:27 am pacific)

Stocks rally this morning on the back of Apple, as the tech giant reports stronger than expected earnings carrying the Nasdaq above the 3,000 level.  After being beat down 6% in the month of April, Apple shares rallied back 9.1% after reporting surprisingly strong earnings results including net income that nearly doubled.  Markets around the world were carried into gains on the positive Apple news.  In economic news in the US, orders for durable goods fell in March by the most in 3 years.  Orders for durable goods (big ticket items that are targeted to last more than 3 years) slid 4.2% in March, while February’s numbers were also revised downward.  Excluding the volatile defense and transport sectors, the core capital goods declined 0.8% for the month.  Investors are anticipating the press conference of Fed Chariman Ben Bernanke later this afternoon, as the Federal Open Market Committee wraps up its 2 day meeting.  Economists believe the Fed will not make any changes to its current asset purchase program and expect that interest rates will remain low until 2014 as the Fed has stated on numerous occasions.  In Europe, stocks rise on solid earnings from Spanish banks.  Bank BBVA jumped 3.7% after reporting profits that beat forecasts and stating that they had met the EU’s capital requirements.  Bankinster SA surged 7.5% after reporting a 1.8% rise in profits .  Spanish yields fell slightly to 5.84%.  Asian stocks also rallied as Apple news helped to lift tech firms.  In China, stocks climbed on market speculation that Beijing may reduce the reserve requirements for banks in order to improve liquidity.  Oil prices climbed 0.32% to 103.88 while gold traded flat to start the day at 1643.10.  The US dollar was down and the 10 yr. treasury yield bounced back to 2.00%.  30 yr. mortgage rates remained at all time lows at 3.82%.  The VIX was down 5.97% to 17.02.    

Economic Journal - Tuesday, 4/24/2012

(As of 7:42 am pacific)

Stocks recover after yesterday’s losses but the rally is tempered by US home sales data.  US home prices dropped sharply in February hitting the worst level in nearly a decade, according to the S&P/Case-Shiller 20-city composite Index.  The index fell 0.8% from January and 3.5% year over year.  The index hit its lowest level since October 2002 with 16 of the 20 cities measuring negative readings while only 3 showed gains.   According to private research group, the Conference Board, a US consumer confidence gauge fell to 69.2 in April from a revised March reading of 69.5, declining for the second month in a row.  Earnings dominated the morning session with several companies posting better than expected results.  AT&T profits rose to $3.58 billion or 60 cents/share, shares were up 3.5%.  3M Co. profits rose 5% beating estimates.  The maker of adhesives and other industrial products raised the low end of its 2012 earnings forecast to $6.35 a share and kept its top end at $6.50 a share.   After hitting its lowest level since mid January during trading yesterday, the Stoxx Europe 600 bounced back.  European markets were hit hard yesterday on weak manufacturing data and political uncertainty in France and the Netherlands.  Asian stocks were mixed and Japanese shares declined as the yen appreciated because of European worries.  Oil bounce back up 0.86% to 104.00 and gold also added back 0.81% to 1645.90.  The US dollar was down and the 10 yr. treasury yield rose to 1.95%.  The 30 yr. mortgage rate remained at historic lows at 3.82%.  The CBOE volatility index opened flat at 19.11.

Economic Journal - Monday, 4/23/2012

(As of 8:00 am pacific)

Stocks open sharply lower to start the week as political concerns out of Europe, disappointing data out of China, and a bribery scandal at retail giant Wal-Mart send the markets into the red.   The 3 major US stock indices, the Dow, S&P, and Nasdaq were all down 1%-1.5% to start the week as concern about global recovery weigh on the markets.  In Europe, the euro-zone preliminary (flash) composite purchasing managers index (PMI) fell to 47.4 in April down from 49.1 in March.  The manufacturing  PMI component fell to a 34 month low, while services PMI gauge fell to a 5 month low.  A reading below 50 on this economic indicator signals contraction.  Also weighing on European markets, which were down 2%-3% today, are political concerns out of France and the Netherlands.  France President Nicolas Sarkozy came in second to socialist candidate Francois Hollande in a first-round presidential poll over the weekend, becoming the 1^st incumbent to not lead in re-election.  Also, over the weekend, Dutch Prime Minister Mark Rutte signals his preparation to resign after a weekend of disappointing budget talks.  Dutch bond yields jumped over concern the country could soon lose its AAA credit rating.  In China, preliminary PMI data shows another contractionary month.  Flash PMI rose slightly to 49.1 in April compared to 48.3 in March, a slight increase but still below the critical 50 level.   Asian markets responded by shedding 0.5%.  In the US, Dow component and retail giant, Wal-Mart Stores led the broad market decline after the New York Times reported that the Mexican subsidiary reportedly used bribery to expand growth.  Shares of Wal-Mart were down as much as 5% to open.  Oil prices fell 1.80% to 102.01 while gold also shed 0.82% to 1629.40.  The US dollar strengthened while the 10 yr. treasury yield slipped to 1.91%.  30 yr. mortgage rates hit a record low at 3.85%.  The volatility Index (VIX) soared 15% to break over 20 at 20.10 at 8:00 am pacific.

Economic Journal - Friday, 4/20/2012

(As of 8:41 am pacific)

The markets drifted higher this morning as earnings dominated the headlines.  No major economic reports were due out this morning, as investors drawn toward healthy earnings reports from several large US companies.  Microsoft shares led the way rising 5.35% on a strong earnings report.  GE profit drops, but CEO Jeff Immelt says GE is positioned for double digit growth.   Schlumberger profits gain, beating estimates and causing shares to rise 4.30%.  McDonald’s first-quarter earnings rose 4.8% as sales grew faster than expected, stock up 2.09%.  European markets traded mostly higher, with Spanish stocks rising as investors find it a good time to buy cheap.  Nothing fundamentally changed for Spain.  Asian stocks mostly lower, however China indices up 1%.  WTI crude oil prices climb 1.51% to 103.81 while gold trades relatively flat at 1642.  The US dollar was down and the 10 yr. treasury yield rose slightly to 1.98%.  30 yr. mortgage rates remained low at 3.88%.  The CBOE volatility index dropped 5.83% to 17.29.

Economic Journal - Thursday, 4/19/2012

(As of 7:30 am pacific)

US stocks play tug of war to start the session with the Dow Jones Industrial Average opening flat then surging 40 points then reversing down 50 all within the first hour of trading. The Labor Dept. reported this morning that US jobless claims for the week ending April 14^th remained near a 4 month high.  After a surprise spike in jobless claims 2 weeks ago, analysts expected a decline for last week.  Jobless claims totaled 386,000, down slightly from an upward revised 388,000 2 weeks ago.  Economists expected claims to fall to 374,000.  The 4 week average for claims rose by 5,500 to 374,750 the highest its been since January.  Earnings reports continue to come in with the market liking what it sees so far for Q1 2012.  Bank of America reported profits and revenue that were lower, but beat estimates, and shares rose 2%.  Morgan Stanley also beat estimates and Verizon Communications posted strong earnings.  According to a report from Bloomberg, the Bloomberg Consumer Comfort index improved last week equaling a high from 2 weeks ago that was the best it’s been since March 2008.  In Europe, stocks were mixed as markets pondered how to respond to a Spanish bond auction that took place earlier today.  Yields (borrowing costs) on 10 yr. Spanish bonds climbed in the auction where Spain sold 2.54 billion euros of 2 yr. and 10 yr. debt.  In Asia, markets were mixed with Japanese stocks declining the most, while Hong Kong and Australia rose.  Oil prices slipped 0.5% to 102.10 while gold added 0.40% to 1646.  The US dollar was mixed and the 10 yr. treasury yield fell slightly to 1.96%.  30 yr. mortgage rates remained near all time lows at 3.88%.  The CBOE volatility index was down 0.75% to 18.50 at 7:30 am pacific.

Economic Journal - Wednesday, 4/18/2012

(As of 7:28 am pacific)

Stocks open lower as tech stocks lead the retreat on poor earnings announcements.  Tech giants Intel and IBM both reported 1^st quarter earnings results today that missed estimates.  Slowing sales growth on European woes caused the two stocks to miss earnings.  Intel shares were down 1.5% and IBM shares were down 2.6% at 7:21 am pacific time. In other earnings news, Yahoo shares rise 3% as earnings beat estimates and new CEO Scott Thompson’s plan to turn the company around gives investors confidence. Overall tone in the market today is earnings driven coupled with some profit taking from yesterdays rally.  European stocks were down 0.5% this morning as Spanish banks lead the way.  The Bank of Spain reported the ratio of bad loans for banks hit a 17 year high in February of 8.2%.  Asian stocks rally higher today, up 2%, taking cues from the US rally yesterday, tracking gains on a strong Spanish bond auction Tuesday and a surprisingly positive German consumer sentiment reading.  Oil and gold are both down 0.31% and 0.37% respectively.  The US dollar is up slightly and the 10 yr. treasury yield is down 2 basis points to 1.98%.  30 yr. mortgage rates continue to settle near all time lows at 3.87%.  The CBOE volatility index was up 0.6% to 18.57 at 7:28 am pacific. 

Economic Journal - Tuesday, 4/17/2012

(As of 7:42 am pacific)

Stocks open higher on several positive economic reports.  The Commerce Dept.  reported today that US housing starts fell 5.8% to 654,000 in March while building permits jumped to their highest level in more than 3 years, climbing 4.5% to 747,000.  Multi-dwelling permits jumped 24.2%, while single-family homes, which account for ¾ of the market for new housing dipped 3.5%.  The Federal Reserve announced that Industrial production was unchanged for the second consecutive month, while economists had expected a slight gain of 0.3%.  In Europe, the German ZEW Index, a gauge of investor confidence unexpectedly rose for a 5^th straight month.  Spanish and Italian bond yields slipped helping European stocks drift higher for the day.  Asian markets slid on Tuesday led by continued concern over China.  Data released today showed foreign direct investment into China fell 6.1% in March from a year earlier, attributed largely to the impact of the European debt crisis and slowing Chinese growth.  The International Monetary Fund raised its global economic growth forecast, projecting the world economy would expand 3.5% this year and 4.1% in 2013.  Forecasts were lifted from January estimates of 3.3% and 4.0% respectively.  Projections for the US economy also were lifted to 2.1% growth in 2012 and 2.4% in 2013.  Oil gained 1.78% this morning to 104.76, while gold edged up slightly to 1653.  The US dollar was mixed.  30 yr. mortgages were down slightly to 3.86% and the 10 yr. treasury yield edged up to 2.00%.  The CBOE volatility index was down 5.47%.

Economic Journal - Monday, 4/16/2012

(As of 9:13 am pacific)

US stocks drifted higher to start the session, but the Nasdaq fell with AAPL shares leading the way.  Shares of Citigroup were up 3.2% on better than expected earnings, lifting financial shares.   March retail sales came in this morning topping expectations.  According to the Commerce Dept. March retail sales rose 0.8%, nearly 3 times as large as projected and followed a 1% advance in February.  Electronics, clothing, and furniture stores were among the categories showing growth.  Perhaps looming larger than the retail sales figures was a report that showed New York area manufacturing expanded at the slowest pace in 5 months.  The New York Empire State Index, which measures manufacturing activity throughout New York, Northern  New Jersey and southern Connecticut, was off unexpectedly.  In Europe, stocks rose slightly while Spanish bond yields drifted higher.  European officials will travel to Washington DC later this week for the International Monetary Fund’s spring meeting to discuss seeking more funding for the euro-are debt crisis which now focuses on Spain as the most recent concern.  In Asia, stocks were down to start the week on concern over Spain’s rising borrowing costs.  Commodities were down with oil off 0.70% to 102.18 and gold down 0.50% to 1652.  The US dollar was mixed and the 10 yr. treasury yield was down slightly to 1.98%.  30 yr. mortgage rates continued to slip lower to 3.88%.  The CBOE volatility index started down 4% then quickly turned positive.

Economic Journal - Friday, 4/13/2012

(As of 7:10 am pacific)

Stocks started lower today as investors worry over a report showing slower than expected growth in China.  On Friday, China reported its gross domestic product for the first quarter of 2012 rose 8.1%, less than the 8.4% expected by analysts.  Concern over China’s growth prospects rattled markets worldwide, with US indices taking back 0.75% and European stocks also retreating anywhere from 1%-2%.  In economic news, the US Labor Dept. reported cost of living rose in March.  The consumer price index (CPI) climbed 0.3% in March, slightly higher than expected.  Excluding volatile food and energy prices, the Core CPI climbed 0.2% in March.  The Thomson Reuters/University of Michigan Consumer Sentiment gauge for April fell to 75.7 from 76.2 at the end of last month.  Economists expected a reading of 76.2 to start April.  As a comparison, the consumer sentiment gauge averaged a reading of 89 in the 5 years leading up to the recession in 2007.  In Europe, stocks retreat on Chinese GDP data and concern over Spain.  Spanish stocks plunged to a 3 yr. low as data showed Spanish banks increased borrowing from the European Central Bank, nearly doubling the funds borrowed in March than in the prior month.  Spain continues to battle to avoid becoming the 4^th euro-area nation to receive bailout.  Oil prices dipped 0.44% to 103.18 and gold also retreated 0.79% to 1667.40.  The US dollar climbed against most currencies.  30 yr. mortgage rates remained around 3.90%.  The 10 yr. treasury yield fell5 basis points to 1.99% and the volatility index climbed 3.90% to 17.87.

Economic Journal - Thursday, 4/12/2012

(As of 7:45 am pacific)

Stocks open modestly higher on a flood of economic reports.  The Labor dept. reported today that US jobless claims rose last week to the highest level in 2.5 months.  The number of people applying for jobless benefits jumped by 13,000 last week to 380,000.  Many analysts believe the rise was due to seasonal quirks with spring break allowing many school workers to apply for jobless benefits as well as seasonal adjustments with the Easter holiday.  The 4 week average, which is a more accurate reading rose slightly by 4,250 to 368,500.  The PPI (producer price index) was unchanged last month following a 0.4% increase in February.  Economists forecasted a 0.1% decline for March.  When you strip the volatile categories of food and energy prices, the core PPI (which is a more accurate gauge of inflationary pressures) rose by 0.3% for the month of March.  Core prices have risen 2.9% over the previous 12 months.  According to the Commerce dept. the US trade deficit narrowed in February recording the largest percentage drop since May 2009.  The deficit hit 46 billion in February compared to 52.5 billion in January – a 12.4% drop.  Exports rose 0.1% on the month to $181.2 billion, while imports fell 2.7% to $227.2 billion.  US consumer confidence remained at a 4 year high last week.  The reading came in at -32.8, second only to the previous week’s reading of -31.4.  The Fed’s “Beige Book” came out yesterday afternoon, with comments generally in line with expectations.  According to the report, the US economy continues to grow at a “modest to moderate” pace – the same phrase that’s been used in the precious 2 reports.  The Fed also announced they plan to keep interest rates low.  Oil was up slightly to 102.93 and gold trade flat to open at 1661.  The US dollar was down and 10 yr. treasury yields were flat at 2.04%.  30 yr. mortgage rates drifted down to 3.91%.  The CBOE volatility index was down 4.25% to 19.17. 

Economic Journal - Wednesday, 4/11/2012

(As of 6:54 am pacific time)

Stocks rallied back on Wednesday after the worst day of the year for the markets had the Dow falling 213 points Tuesday.  Stocks took back have of yesterday’s losses to start as earnings season gets underway.  Alcoa kicked it off with surprising profits that beat analysts estimates.  The aluminum-maker reported Q1 net income of $94 million, or 9 cents/share on 6 billion in revenue.  Analysts expected a loss of 3 cents/share on 5.77 billion.  In economic news, the US government reported import prices rose 1.3% in March, pointing to rising oil prices as the main contributor.  Also due out later today is the Fed’s Beige Book, a report put out by the Fed 8 times a year with information on the economic condition of the US.  It is put out just ahead of each Federal Open Market Committee meeting. In Europe, Germany sold 3.87 billion euros of 10 yr. government bunds in auction that produced a record low yield of 1.77%.  Italy also met its target in a similar bond auction today.  Spanish bond yields were driven lower as a member of the executive board of the European Central Bank reportedly said that the ECB still has the option to help reduce Spain’s borrowing costs by restarting its bond-buying program.  Oil rose 0.65% to 101.68 and gold opened flat at 1660.20.  The US dollar was down against most currencies across the board.  30 yr. mortgage rates drifted lower to 3.89%.  10 yr. treasury yields added back 5 basis points to 2.03%.  The CBOE volatility index was down 5.64% to 19.24.

Economic Journal - Tuesday, 4/10/2012

(Written as of 7:44 am pacific)

Stocks open mixed this morning as the market anticipates Q1 earnings which will kick off with Alcoa later this afternoon.  Stocks closed sharply down yesterday, suffering their worst drop in a month as the market had a chance to digest the disappointing jobs data from Friday.  European stocks retreated this morning, down 1.3% as their markets opened for the first time in 4 days, catching up to the US jobs news.  Asian stocks also fell 1.2% on disappointing jobs data and reports out of China.  China reported imports grew less than expected in March highlighting a continued concern of an internal slowdown.   Demand seen to be weakening.  In March, China showed a trade surplus of $5.35 billion.  Estimates were for a trade deficit of $3.5 billion.  In US company news, Facebook dominated headlines once again as the social network company announced their purchase of the successful photo-sharing application company, Instagram, for a reported $1 billion.  Oil prices were flat this morning to open at 102.49.  Gold was up slightly at 1645.70.  The US dollar was mostly up across the board.  30 yr. mortgage rates were down to 3.92% and the 10 yr. treasury yield was down slightly to 2.02%.  The VIX was relatively quiet, up slightly to 18.87.

Economic Journal - Monday, 4/9/2012

US stocks traded sharply lower this morning after disappointing jobs data that hit on Friday when the market was closed for Good Friday holiday.  Stock futures fell on Friday after the Labor dept. reported that just 120,000 jobs were created in March, the fewest in 5 months.  Nonfarm payrolls fell short of expectations as analysts estimated 210,000 jobs to be added in March.  It was the first time since November that job growth was below 200,000.  The market responded negatively to this data on Monday, sending all 3 major indices, the DOW, Nasdaq, and S&P500 down 1% or more.  In other parts of the world, China reports consumer prices climbed 3.6% in March from a year ago, exceeding the 3.3% rise that was expected.  Inflation increased from February’s 3.2%, but slowed based on the January/February average thus far of 3.9%.  Asian markets were down 1%.  In company news, AOL shares jump 43% after an agreement to sell more than 800 patents to Microsoft in a $1.056 billion deal.  Oil prices fell 1.95% at 7:00am pacific time to 101.30.  Gold was up 0.99% to 1646.20.  The US dollar was up across the board.  30 yr. mortgage rates fell slightly to 3.96% and the 10 yr. treasury yield also fell to 2.04%.  The CBOE volatility index jumped 12.46% to 18.78. 

Economic Journal - Friday, 4/6/2012

The stock market is closed today for Good Friday.

Economic Journal - Thursday, 4/5/2012

Stocks open lower for a third straight session as the markets continue to slide from yesterday’s lows.   Yesterday stocks tallied one of the worst sessions of the year thus far with the Dow off by 0.9%, the Nasdaq down 1.5% and the S&P500 shedding 1.02%.  Today, several large US retailers, including Target, Gap Inc. and Macy’s reported better-than-expected sales for March.  Analysts are citing an earlier Easter holiday and warmer weather to go along with better underlying trends in consumer spending.  The Labor dept. reported US jobless claims fell to 357,000 last week, down from an upwardly revised 363,000 in the week before.  The 4 week rolling average dropped by 4,250 to 361,750 -  the lowest monthly total since April 2008.  The monthly average of claims gives a better reading of labor market trends because it smooths out seasonal quirks.  US employers announced fewer job cuts in March than a year earlier.  Planned firings fell by 8.8% from a year ago to a 10-month low of 37,880 according to Challenger, Gray and Christmas, a job placement firm based out of Chicago.  Canada also saw jobs rise at the highest rate since 2008 while the jobless rate fell to 7.2% from 7.4%.  The market continues to focus on Europe today.  Worries over yesterday’s disappointing Spanish bond auction and rising bond yields in several European countries are causing investors to fear Europe’s dealings with its debt situation.  European stocks were lower and Asian stocks continued to retreat.  Oil bounced back 0.58% to 102.06 and gold rallied 1.07% to 1631.30. The US dollar was mixed while the 10 yr. treasury yield fell slightly to 2.19%.  30 yr. mortgage rates drifted up to 4.04%.  The CBOE volatility index was up 1.28% to 16.65.  All figures quoted were as of 7:30 am pacific time.

Economic Journal - Wednesday, 4/4/2012

Global stocks continue to drift downward as Europe dominates the headlines.  US stocks shrug off positive economic reports and focus on Fed meeting minutes from yesterday as well as news out of Europe.  Stocks tumbled yesterday afternoon as the FOMC’s most recent meeting minutes released signaled the Fed may refrain from more quantitative easing, causing investors to fear a lack of liquidity in the markets.  That fear continued into today’s session despite strong US economic reports.  According to ADP, private sector employment rose 209,000 in March, for the 26^th month of gains.  The report for February was also revised upward to 230,000 from a prior estimate of 216,000.  The Institute for Supply Management said its services index fell to 56.0% last month from 57.3% in February.  The services sector accounts for ¾ of output for the US economy.  The ISM index has remained above the 50 level for 27 straight months.  A reading above 50 indicates expansion.  US Treasury Secretary, Timothy Geithner also said in a speech to the economic club of Chicago that household debt is down 17% relative to income since before the crisis.  In Europe, stocks were down over 2% this morning on concern over Spain’s debt situation.  In a bond auction today, Spain sold 2.59 billion euros of bonds, less than their target max of 3.5 billion euros, driving yields higher in a disappointing bond auction.  Worries about Spain’s deficit and rising unemployment sent stocks tumbling.  The European Central Bank (ECB) also announced that they will leave its key lending rating unchanged at a record low of 1%.  Asian markets were also hit today following a reported trade deficit in Australia.  Commodities were down with oil down 2.06% to 101.87 and gold down 3.11% to 1620.  The US dollar strengthened as the markets were down.  The 30 yr. mortgage rate climbed to 4.03% while the 10 yr. treasury yield dipped slightly to 2.24%.  The CBOE Volatility Index rose 8% to 16.92. 

Economic Journal - Tuesday, 4/3/2012

Stocks retreated Tuesday after opening the 2^nd quarter Monday in positive territory.  It was a relatively quiet morning in economic new around the globe.  In the US, the Commerce Dept. reported that orders for goods produced in US factories rose 1.3% in February just shy of estimates.  Orders for durable goods jumped 2.4% in February and orders for nondurable goods rose 0.4% compared with a 1.0% gain in January.  Later this morning, the Federal Open Market Committee’s (FOMC) most recent meeting minutes are scheduled to be released.  In company news, Chrysler Group is the first to report March sales numbers, with the auto maker reporting sales jumped 34% last month.  Around the globe, European stocks traded lower in a choppy session led by banks.  Asian markets rebounded today on positive US manufacturing data from yesterday.  The Hong Kong Hang Seng Index snapped a 4 day losing streak climbing 1.3%, while Japan’s Nikkei Index was off 0.6%.  Oil slipped 0.3% to 104.9 while gold edged up slightly to 1681.  US dollar was mostly down across the board but gained slightly against the euro.  30 yr. mortgage rates were flat at 3.98% while the 10 yr. treasury yield bumped down slightly to 2.17.  The CBOE volatility index opened flat at 15.66.

Economic Journal - Monday, 4/2/2012

Stocks opened down but finished the day in positive territory on day one of the 2^nd quarter.  After a strong first quarter, where the 3 major indices finished near or above 10%, stocks rallied to open the month of April.  The quarter started with a merger and acquisition focus with cosmetics firm Coty Inc. proposing a buyout offer for Avon Products valued at $10 billion that was later rejected by Avon.  In other company news, Groupon shares fell nearly 17% as the daily deals provider issued a revision to its Q4 2011 results, recognizing changes in the way it accounts for refund reserves.  In economic news, the Institute for Supply Management manufacturing gauge rose to 53.4% last month from 52.$ in February, right in line with estimates.  A reading of over 50 signals growth.  Construction spending unexpectedly fell 1.1% in February, the Commerce Dept. reported.  The drop was the highest in 7 mos. and followed a 0.8% drop in January.  Oil prices started the day down, but rallied up 1.97% to 105.05.  Gold  also added 6 points to 1677.  The US dollar was mixed and the 10 yr. treasury yield was down slightly to 2.19%.  30 yr. mortgage rates were down to 3.97%.  The CBOE Volatility Index was up 0.84% to 15.63.