Dow dropped 65, decliners over advancers 2-1 & even NAZ fell, down 6, as Apple had to settle for a gain of only 10+. The Financial Index fell 1+ to 213 on growing worries about new regulations. MLPs found some buying, taking the index up 1+ to the 394s but the REIT index fell 1+ to the 254s. Junk bond funds were mixed but Treasuries fell back, taking the yield on the 10 year treasury up 9 basis points to 2.28%. Oil & gold tumbled after release of the minutes from the last FOMC meeting.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
China's economy may have expanded at an 8.4% annual rate in Q1 (the least since H1 2009) according to a preliminary estimate given by an official. The official cited “relevant China research institutes’ initial figures” for the estimate & predicted a gain of about 3.5% in consumer prices. The growth figure compares with the 8.3% median estimate of economists. Its 5th straight slowdown in quarterly growth will underscore concerns that weakness in the Chinese economy is set to limit a global expansion already capped by Europe's austerity measures. Premier Wen Jiabao pared this year’s expansion target to 7.5% from an 8% goal in place since 2005 on Mar 5 as part of gov plans to tilt growth toward consumption & away from exports. In Q4, the annual growth rate was 8.9%. China had its largest trade deficit since 1989 in Feb as Europe’s debt turmoil damped exports & imports rebounded after the weeklong Lunar New Year holiday. Exports fell for the first time in 2 years in Jan, while industrial production & retail sales have slowed this year. Changes in the Chinese economy affect trading around the world.
Photo: Yahoo
The Federal Reserve (FED) is worried that recent strong gains in hiring could fizzle if US economic growth doesn't pick up, but there's no widespread support for additional bond purchases, even if the economy worsens. At its recent meeting, the FED spent very little time discussing another round of bond purchases. When the idea was mentioned, only a couple members said they would support it & only if the economy lost momentum or inflation stayed below the target rate of 2%. The FED stuck with its plan to keep interest rates at record lows until at least late 2014 & it sketched a slightly sunnier view of the economy, largely because of the best 3 months of hiring in 2 years. But some noted that there have been similar bursts of hiring in the past 2 years that ended up fading. The readout from the last meeting largely echoed a speech Ben Bernanke gave last week. The FED is concerned that the recovery could falter, as it did last year. Americans aren't receiving meaningful pay increases. Gas prices are high & Europe's debt crisis could weigh on the US economy. As long as inflation remains tame, the FED is likely to hold interest rates down to give the economy more support. While the economy is recovering, it's difficult to make the case for a QE3,
FOMC Saw No Need of New Monetary Easing, March Minutes Show
The average price for gas at the pump is still over $3.92, essentially matching last year's record high & just pennies below the all time record of $4.11 in 2008. Stock markets don't like high prices.
Source: AAA
The markets had a mild sell-off, they're entitled after the long run over the last 6 months. Auto sales are getting a luke-warm reception, good but short of great. Analysts would like to see an annual rate above 14M vehicles which is not certain, especially if the economic recovery slows. MLPs have given up their title as market leaders. The MLP index is up only 5 YTD & 17 below the record set in Feb.
JPMorgan Chase Capital XVI (AMJ)
Click below for the latest market update:
Treasury yields:
U.S. 3-month | 0.071% | |
U.S. 2-year | 0.364% | |
U.S. 10-year | 2.275% |
| CLK12.NYM | Crude Oil May 12 | 103.95 |  1.28 (1.22%) |
China's economy may have expanded at an 8.4% annual rate in Q1 (the least since H1 2009) according to a preliminary estimate given by an official. The official cited “relevant China research institutes’ initial figures” for the estimate & predicted a gain of about 3.5% in consumer prices. The growth figure compares with the 8.3% median estimate of economists. Its 5th straight slowdown in quarterly growth will underscore concerns that weakness in the Chinese economy is set to limit a global expansion already capped by Europe's austerity measures. Premier Wen Jiabao pared this year’s expansion target to 7.5% from an 8% goal in place since 2005 on Mar 5 as part of gov plans to tilt growth toward consumption & away from exports. In Q4, the annual growth rate was 8.9%. China had its largest trade deficit since 1989 in Feb as Europe’s debt turmoil damped exports & imports rebounded after the weeklong Lunar New Year holiday. Exports fell for the first time in 2 years in Jan, while industrial production & retail sales have slowed this year. Changes in the Chinese economy affect trading around the world.
Photo: Yahoo
The Federal Reserve (FED) is worried that recent strong gains in hiring could fizzle if US economic growth doesn't pick up, but there's no widespread support for additional bond purchases, even if the economy worsens. At its recent meeting, the FED spent very little time discussing another round of bond purchases. When the idea was mentioned, only a couple members said they would support it & only if the economy lost momentum or inflation stayed below the target rate of 2%. The FED stuck with its plan to keep interest rates at record lows until at least late 2014 & it sketched a slightly sunnier view of the economy, largely because of the best 3 months of hiring in 2 years. But some noted that there have been similar bursts of hiring in the past 2 years that ended up fading. The readout from the last meeting largely echoed a speech Ben Bernanke gave last week. The FED is concerned that the recovery could falter, as it did last year. Americans aren't receiving meaningful pay increases. Gas prices are high & Europe's debt crisis could weigh on the US economy. As long as inflation remains tame, the FED is likely to hold interest rates down to give the economy more support. While the economy is recovering, it's difficult to make the case for a QE3,
FOMC Saw No Need of New Monetary Easing, March Minutes Show
The average price for gas at the pump is still over $3.92, essentially matching last year's record high & just pennies below the all time record of $4.11 in 2008. Stock markets don't like high prices.
The markets had a mild sell-off, they're entitled after the long run over the last 6 months. Auto sales are getting a luke-warm reception, good but short of great. Analysts would like to see an annual rate above 14M vehicles which is not certain, especially if the economic recovery slows. MLPs have given up their title as market leaders. The MLP index is up only 5 YTD & 17 below the record set in Feb.
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1 comment:
Hi,
This is an excellent written article, Thanks for yet another insightful post, as always!
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