Archive for the ‘Economic Indicators’ Category
After a two month delinquency in updates we’re back. And, wow - what a market to start writing about again. Since our last post in April, the S&P 500 lost 9% of its value while the Dow surrendered a hefty 11%. In fact, we are knee deep in recession as far as textbooks go - with the Dow crossing the 20% drop mark in early July. So, what now? To steal a line from the late great Douglas Adams - don’t panic. The slow market days of summer are the perfect time to step back and reassess the situation. (more…)
The Bureau of Labor Statistics announced unemployment jumped to 5.1% in March this morning, confirming investor fears that the US is in the throes of a recession. Per the data, non-farm payrolls fell by 80,000 in March, led by further declines in manufacturing, construction, and employment services.
Bad News Gets Worse
Of particular note is a decline of 35,000 jobs in professional and business services. This is unsettling for Wall Street, as these jobs had remained resistant to the declining job market until now.
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Jobless claims announced this morning grew to 407,000 (week-end 3/29) vs. the consensus estimate of 365,000 and prior period claims of 366,000. The markets already show signs of weakness on the heels of the news, as investors typically put significant weight on employment data when evaluating the health of the economy.
Tags: The Stock Market
The stock markets look ready to open down this morning after Wall Street digests yesterday’s key events. The Federal Reserve once again lowered the Fed Funds rate about 3/4 of a percentage point to 2.25%, disappointing investors who were looking for a full point rate cut. According to The Wall Street Journal, the move was a sign that the Fed is looking to rely on other options besides interest rates to stimulate the market (in order to keep inflation in check).
The Stock Market & Bank Stocks Rise
Also making headlines were better than expected earnings at major banks such as Morgan Stanley (NYSE: MS), Lehman Brothers (NYSE: LEH) and Goldman Sachs (NYSE: GS). All three stocks had suffered over the past year from uncertainty surrounding the subprime lending fiasco. The market reacted positively to both major news items, as the Dow closed up about 3.5%.
The US Bureau of Labor Statistics released February ‘08 Consumer Price Index (CPI) numbers this morning, showing that price levels remained relatively flat vs. January. Both the overall CPI and the CPI less food and energy showed a 0% increase vs. the prior month (in January, the CPI increased 0.4% and 0.3% respectively vs. December ‘07).
The Stock Market Reaction
The stock market is looking for a positive open on the heels of the announcement, as futures are up ahead of the bell. However, many question the decrease in energy prices that the report factors in (i.e., a 2% decrease in gasoline prices), so we may see stocks move lower by market close.
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Tags: CPI Numbers
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