(As of 7:47 am pacific)
The market is trending downward this morning as several
economic reports disappoint. US jobless
claims fell slightly last week, but still remain near yearly highs. Sales
of existing homes in the US fell 1.5% in May but mostly due to an inventory
shortage in lower-priced homes. A
number of preliminary gauges of manufacturing activity dropped around the world
signaling a slowing in output. In the
US, the preliminary figures showed manufacturing activity grew at the slowest
pace in 11 months. The Philly Fed
reported factory activity in the Philadelphia region fell to the lowest level
in 10 months. In Europe, manufacturing
contracted at the fastest pace in 36 months, while a Chinese preliminary report
showed manufacturing weakened to a 7 month low. Commodity prices were hit hard, with gold
and oil prices falling 1.5% as the dollar strengthened on Fed comments
yesterday. Coming out of a 2 day Federal
Open Market Committee (FOMC) meeting, Fed Chairman Ben Bernanke indicated that
the central bank would continue its bond buying program, known as Operation
Twist, in an effort to keep longer term interest rates at historically low
levels. However, Bernanke refrained from
making any indication that the Fed would conduct additional quantitative easing
in the near future. Investors were
looking to the Fed to provide more liquidity to markets in the form of
QE3. Interest rates were lower and
volatility was up slightly.
