Economic Journal - Tuesday, 2/24/2015

(As of 7:15 am PST)

It’s another quiet start to the trading session Tuesday, as investors appeared cautious ahead of Federal Reserve Chairwoman Janet Yellen’s testimony before Congress this morning.  The major US benchmarks opened near the unchanged line with the Dow Jones Industrial Average inching up into the green led by a surprisingly strong earnings report from Home Depot. The economic calendar is light with a report on consumer confidence coming in weaker than expected while the Case-Shiller Home Price index showed housing prices rising above expectations. The key event of the day will be Yellen’s testimony on monetary policy before Congress, which just kicked off minutes ago. Investors will be particularly interested in Yellen’s remarks about the Fed’s plans to raise short term interest rates and whether she will begin to introduce a more ‘hawkish’ tone. In the early going, Yellen has said the Fed, as a part of its communication strategy, will drop the term ‘patient’ from its policy statement. In other news, international markets are on pace for slight gains today. Gold is down $10/oz. while oil is recovering slightly. Expect some back and forth action throughout Yellen’s testimony this morning but for market direction to firm up later in the session.

Economic Journal - Monday, 2/23/2015

(as of 7:00 AM PST)

Friday's surprise end of day rally seemed to break the week long funk of the stock market.  The lack of interest reflected by low volume and range bound trading seems to be back at his morning's open.  The Dow and S&P are holding moderate losses while the Nasdaq is fighting back from an early decline and is currently unchanged.  Oil is down nearly 3% on supply concerns.  Gold is flat.  A 4 month extension of the Greek financial aid program was the catalyst for Friday's gain but current negative comments from the new governing political party have dampened optimism for a positive solution.  With corporate earnings season almost over attention might shift to current growth estimates, which are none too sterling.  It's hard to see where the next catalyst will come from to push markets up further.  Losses may deepen as the day wears on.

Economic Journal - Friday, 2/20/2015

(As of 7:20 am PST)

US equities are lower to start Friday’s session. With little economic data to dissect, investors turned to the drama that continues to unfold between Greece and the Eurozone.  A key meeting between Eurozone finance ministers in Brussels today will hopefully provide some sort of deal regarding Greece’s financial future. In the meantime, the uncertainty is beginning to frustrate investors as complacency seems to be setting in. At home, the economic calendar is light, however a “flash” reading of the Markit manufacturing PMI showed manufacturing activity edging higher in February. In Asia, stocks finished the week on a high note with the Japanese Nikkei hitting a 15 year high. In Europe, stocks are down for the session but still on pace for strong weekly gains. Gold and oil are both lower today as are interest rates while the US dollar continues to strengthen against most major world currencies. 

Economic Journal - Thursday, 2/19/2015

(as of 7:15 AM PST)

 

There is a lot of data for analysts to chew on this morning.  The biggest story is the huge increase in US oil supplies indicating that there is a glut of crude that is straining the storage capacity of the system.  Crude oil supplies jumped by 14 million barrels, far exceeding estimates of a 3 million increase.  Oil has fallen by 5% in the early going and may lapse into another free fall mode in the next few days.  US economic data has been mixed indicating that the US economic recovery may not be a strong as thought.  Leading economic indicators were up slightly, but below estimates.  Likewise, the Philly Fed index, a measure of industrial activity in the Northeast, came in showing muted growth below expectations.  On the plus side jobless claims were down, far more than analysts had hoped.  Stock market indexes are mixed with the Dow and the S&P down modestly with the Nasdaq slightly positive, a continuation of yesterday's pattern.  International markets are mixed.  Asia was strong overnight while Europe is dealing with news of a setback in Greece/Euro negotiations for a bailout.  Gold has recovered some of yesterday's losses.  It seems we are in a holding pattern.  Economic data shows just enough weakness to keep the Federal Reserve Bank at bay on interest rate increases and just enough strength to dampen hopes of future economic stimulus.

Economic Journal - Wednesday, 2/18/2015

(As of 7:00 am PST)

 

US equities are starting the day lower with the S&P500 pulling back from its record close of 2,100 yesterday.  Weak economic data mixed with continuing uncertainty over Greece’s debt negotiations have investors on the defense this morning. Reports on housing starts and building permits missed consensus estimates for January while slowing from the pace set in December. Data on industrial production and capacity utilization also fell just short of estimates adding to the disappointing data that hit the wires early in the session. The big focus for the day will come at 2 pm EST when the minutes of the latest Federal Reserve meeting will be released. With recent language suggesting the Fed is being “patient” in regards to its first rate hike, investors will be looking into today’s meeting minutes for communication that indicates otherwise. In overseas action, Asian stocks finished the day higher on the heels of the US market’s record close yesterday. European indexes are up slightly in a choppy session. Gold is flat and oil is lower after a volatile day yesterday. Interest rates are up slightly while the US dollar is higher. Expect another back and forth day pending any surprises from the Fed, as the bulls and bears duke it out over where to take this seemingly overheated market.