Markets continued to rebound this week. Why? Dramatic improvements in Greece? No. Solid economic news here at home? I don’t think so. A slew of positive earnings reports? Hardly. What are we to make of it?
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns.
Recovery? I would not classify the data this week as defining a recovery. I will be gracious and define the data as mildly negative. Don’t take my word for it, let’s review the data together and you tell me what you see and what I may be missing. Let’s dive right in. Unless a hard number is indicated, the data represents the percentage change for the prior month along with the consensus expectation for the current month and then the actual change for the current month.
1. Personal Income
Prior month .4 (revised to .3); consensus expectation .4; actual .1%
2. Personal Spending
Prior month .2 (revised to .3); consensus expectation .4; actual .5%
3. Construction Spending
Prior month -1.2%; consensus expectation -.8; actual -.6%
Better, but still an overall negative.
4. ISM Manufacturing Index
Prior 58.4; consensus expectation 57.5; actual 56.5
Decent, but disappointing given a negative trendline.
5. Auto Sales
Prior 7.9 million; consensus expectation 7.9mm; actual 7.6mm
Lousy, but go ahead and blame the snow.
6. Store Sales
Prior 1.9%; actual registered only a 1.5% gain
Lousy, but blame the snow again.
7. ISM Non-manufacturing Index
Prior 50.5; consensus expectation 51; actual 53.0
8. Jobless Claims
Prior 496k; consensus expectation 475k; actual 469k
Slight positive, but still high.
9. Pending Home Sales
Prior +1.0%; actual -7.6%
HORRENDOUS!!! Don’t tell me housing is truly improving.
10. Employment Report
Rate: 9.7% vs 9.7% last month, unchanged as expected
Underemployment: rose to 16.8% from 16.5% HORRENDOUS!!
Average Hourly Earnings: rose .1% vs expectation of .2%. Lousy.
Average Workweek: 33.1 hours vs 33.6 expectation. Lousy.
Let’s move along to the MARKET DATA. The stats provided are the week’s close (March 5th), February close, and the percentage change.
$/Yen: 90.28 vs 88.93, +1.5%
Euro/Dollar: 1.3627 vs 1.3622, 0.0%
U.S. Dollar Index: 80.40 vs 80.35, 0.0%
Commentary: the overall U.S. Dollar Index was flat on the week. The Euro was also flat, but remains near a 9 month low. The dollar did firm relative to the Japanese Yen. Goldman Sachs has expressed concern about the debt to GDP level in Japan. They are not the only one concerned about Japan’s debt.
Oil: $81.76/barrel vs $79.61, +2.7%
Gold: $1134.7/oz. vs $1118.4, +1.5%
DJ-UBS Commodity Index: 134.68 vs 133.83, +.6%
Commentary: commodities continued to rebound in sympathy with the positive price action in the equity markets. The overall DJ-UBS Commodity Index is still down approximately 3.5% on the year, despite the fact that oil and gold are both up approximately 3.5% on the year and copper is up 2%.
DJIA: 10, 566 vs 10,325 +2.3%
Nasdaq: 2326 vs 2238,+3.9%
S&P 500: 1139 vs 1104, +3.2%
MSCI Emerging Mkt Index: 961 vs 936, +2.7%
DJ Global ex U.S.: 198.3 vs 191.9, +4.3%
Commentary: another solid week for our domestic equity markets have now brought these averages back into the black for the year by 1-3% on the year. Emerging and international markets also rebounded but remain down on the year by approximately 1.5-3%.
I am still looking for the consistently positive economic news to justify the price action, but the markets seem to accept a lack of disastrous news along with a mixed bag of economic data to take the easy money provided by the Fed and put it to work.
2yr Treasury: .90% vs .82%, +8 basis points or -.08% (rates up, bond prices down)
10yr Treasury: 3.69% vs 3.62%, +7 basis points or +.07%
COY (High Yield): 6.77 vs 6.88 -1.6%
FMY (Mortgage): 18.34 vs 18.48, -.8%
ITE (Government): 57.69 vs 57.88, -0.3%
NXR (Municipal): 14.27 vs 14.21, +.4%
Commentary: interest rates moved higher this week but remain well within the ranges we have seen this year. Debt levels globally and here at home for our government and our municipalities remain exceptionally high.
The roller coaster continues. The January declines — both in the markets and along our economic landscape — were met by a nice upswing in February. The upward trend continues for the first week of March.
What are we to make of it? Well, I hope you are strapped in for a long ride filled with ongoing fits and starts, twists and turns, ups and downs on both Wall Street and more importantly Main Street.
I will do my best to point out both the pitfalls and potential positives along the way. Please help our collective effort by sharing news and developments from your own corners of the world. Together, we can all most effectively navigate the economic landscape.