Economic Journal - Tuesday, 5/26/2015

(As of 7:25 am PST)

US equities are lower to start this holiday shortened week as investors waded through a busy economic data calendar Tuesday. A report on durable goods orders sent stock futures lower early this morning. The headline number showed US orders for durable goods falling 0.5% in April, in line with expectations. However, orders for core capital goods, a representation of business investment, climbed 1% marking the second straight monthly gain. A report on new home sales showed sales rising better than expected in April, bouncing back after March’s sharp decline. Consumer confidence also showed a slight increase in May, enough however to beat consensus estimates. The positive data all around this morning is putting pressure on stocks which began to weaken Friday on a stronger-than-expected inflation report. The positive economic data recently has been received as negative news for stocks as investors remain worried about the Federal Reserve raising interest rates as the economy improves. It seems like we’re back in the “good news-bad news” trade for now, as the Fed’s first rate move remains data dependent. In other news across the globe, Asian markets finished mixed while European stocks are trending lower as investors continued to track developments in the Greek bailout situation. Gold and oil prices are both down 1% this morning, while interest rates are nudging higher. After a long weekend and a low volume week last week, traders are back and Tuesday looks like it’s shaping up to be a busy day.

Economic Journal - Friday, 5/22/2015

(As of 7:15 am PST)

US stocks are see-sawing between mild gains and losses Friday as investors prepared for remarks from Fed Chairwoman, Janet Yellen ahead of the three day holiday weekend. Data is light today with a lone report on consumer prices showing prices picked up in April.  The Labor Department announced Friday that US core prices rose a seasonally adjusted 0.1% in April, while core CPI, which excludes the volatile food and energy sectors, rose 0.3%. The increase in prices was higher than expected causing some to speculate that the pick-up in inflation may drive the Fed to consider raising rates sooner than later. Once again, the timing of the Fed rate hike is unknown although remarks made from Fed officials earlier in the week as well as the recent FOMC minutes seem to indicate a June rate hike is unlikely. Speaking of the Fed, markets are gearing up for this afternoon’s speech from Fed Chief Yellen at a conference in Providence where she will be giving her outlook on the US economy. In other news today, Asian markets headed into the weekend with strong gains while Europe is looking to add to weekly gains seen across the board. Oil prices slipped below $60 per barrel while gold is down slightly. Heading into Friday the S&P500 was up +0.4% on the week, while the Nasdaq was up +0.99% and the Dow up +0.1%. Expect a quiet day today as traders take off early for the Memorial Day weekend.

***The US stock and bond markets will be closed Monday in observance of Memorial Day. Have a safe and happy holiday weekend.***

Economic Journal - Thursday, 5/21/2015

(As of 7:20 am PST)

Disappointing economic data is continuing to pressure stocks this morning a day after the release of the Fed’s latest meeting minutes indicated a June interest rate hike is unlikely. Stock futures pointed to a negative open this morning with the Dow, S&P500 and Nasdaq all trading around the unchanged line. Economic data is mostly disappointing today. Jobless claims rose to a 4 week high while a report on existing home sales showed sales falling 3.3% in April, well below expectations. The Philly Fed index showed manufacturing activity slowed more than expected in May, while the leading economic indicator index rose more than expected, standing as the only positive report on the day. European markets are mostly lower, while Asian stocks finished mixed as investors digested weaker-than-expected manufacturing data out of China. Oil is climbing for the second straight day while gold is down slightly. Complacency seems the order of the day again, as investors remain cautious heading into the summer months.