Dow closed the week gaining 28 today, advancers over decliners 3-2 & NAZ slid 11. The MLP index slipped fractionally to the 457s & the REIT index was up 2+ to the 266s. Junk bond funds continued mixed & Treasuries were weak, taking the yield on the 10 year Treasury back to 3%. Oil dropped
to a one-month low after a gov report showed that
inventories of distillate fuel, a category that includes heating
oil & diesel, & gasoline climbed. Gold climbed again as sellers are taking a holiday to enjoy profits made last year.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
The Federal Reserve (FED) will continue to weigh reductions to a bond-buying program aimed at stimulating growth because improvements in the job market are meeting the central bank’s objectives, Richmond FED President Jeffrey Lacker said. “We’ve seen a substantial improvement in a variety of indicators of labor market conditions, including the unemployment rate & the level of employment,” Lacker said today. “So it made sense to initiate the process of bringing the program to a close. I expect further reductions in the pace of purchases to be under consideration at upcoming meetings.” In his prepared remarks, Lacker said he is predicting growth this year of about 2%, a level that’s “slower than in the past,” even as data at the end of 2013 showed the potential for an acceleration. “The pickup in growth late last year is certainly a welcome development, and it may well be a harbinger of stronger growth ahead,” he said. “But experience with similar growth spurts in the recent past suggests that it is too soon to make that call.” While consumer spending “seems to have surged early in the fourth quarter” last year, Lacker cited “persistent cautiousness” among consumers and said businesses “also appear to be quite reticent to hire and invest.” The recent budget agreement is “welcome relief,” & lower odds of another fiscal showdown “may aid growth,” he added. He expects inflation that’s averaged 0.9% over the past 12 months will move back toward 2% in the next year or 2, cautioning that “this is not a certainty” & the FED will monitor it closely. His comments are part of a program to get the markets ready for more tapering.
Lacker Says Fed to Consider Further Tapering at Coming Meetings
Big Ben said the headwinds that have held back the US economy may be abating, leaving the country poised for faster growth as his tenure as Federal Reserve chairman comes to an end. “The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” Bernanke said today. “Of course, if the experience of the past few years teaches us anything, it is that we should be cautious in our forecasts.” Bernanke used his remarks to reflect on his 8 years as leader of the FED, steering the economy thru the most severe economic & financial crisis since the 1930s. Policy makers last month trimmed the monthly bond buying to $75B, taking a first step toward unwinding unprecedented stimulus to put millions back to work. He said the decision to taper bond purchases “did not indicate any diminution of its commitment to maintain a highly accommodative monetary policy for as long as needed.” He cited payroll employment rising by 7.5M since 2010 & the economy growing in 16 of the 17 qtrs after the recession ended as evidence the his policies have succeeded. “The economy has made considerable progress since the recovery officially began some four and a half years ago.” “When the economy was in free fall in late 2008 and early 2009, such improvement was far from certain, as indicated at the time by stock prices that were nearly 60 percent below current levels and very wide credit spreads,” Bernanke said. One more indication of further tapering.
Bernanke Sees Headwinds Fading as U.S. Poised to Grow
Stocks closed the week mixed to higher on low volume. There was not a lot going on, but next week there will be more news events to drive the markets. The big storm in the eastern US will crimp retail sales which have been lackluster in the last weeks of 2013. The 10 year Treasury yield back at 3% will result in higher mortgage rates, a damper on new housing construction. Apple (AAPL) lost 10, a major drag for NAZ today. Dow is down 106 in the first 2 trading days of the new year.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.06% | |
U.S. 2-year |
0.40% | |
U.S. 10-year |
3.00% |
| CLG14.NYM | ....Crude Oil Feb 14 | ....93.94 |  ...1.50 | (1.6%) |
The Federal Reserve (FED) will continue to weigh reductions to a bond-buying program aimed at stimulating growth because improvements in the job market are meeting the central bank’s objectives, Richmond FED President Jeffrey Lacker said. “We’ve seen a substantial improvement in a variety of indicators of labor market conditions, including the unemployment rate & the level of employment,” Lacker said today. “So it made sense to initiate the process of bringing the program to a close. I expect further reductions in the pace of purchases to be under consideration at upcoming meetings.” In his prepared remarks, Lacker said he is predicting growth this year of about 2%, a level that’s “slower than in the past,” even as data at the end of 2013 showed the potential for an acceleration. “The pickup in growth late last year is certainly a welcome development, and it may well be a harbinger of stronger growth ahead,” he said. “But experience with similar growth spurts in the recent past suggests that it is too soon to make that call.” While consumer spending “seems to have surged early in the fourth quarter” last year, Lacker cited “persistent cautiousness” among consumers and said businesses “also appear to be quite reticent to hire and invest.” The recent budget agreement is “welcome relief,” & lower odds of another fiscal showdown “may aid growth,” he added. He expects inflation that’s averaged 0.9% over the past 12 months will move back toward 2% in the next year or 2, cautioning that “this is not a certainty” & the FED will monitor it closely. His comments are part of a program to get the markets ready for more tapering.
Lacker Says Fed to Consider Further Tapering at Coming Meetings
Big Ben said the headwinds that have held back the US economy may be abating, leaving the country poised for faster growth as his tenure as Federal Reserve chairman comes to an end. “The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” Bernanke said today. “Of course, if the experience of the past few years teaches us anything, it is that we should be cautious in our forecasts.” Bernanke used his remarks to reflect on his 8 years as leader of the FED, steering the economy thru the most severe economic & financial crisis since the 1930s. Policy makers last month trimmed the monthly bond buying to $75B, taking a first step toward unwinding unprecedented stimulus to put millions back to work. He said the decision to taper bond purchases “did not indicate any diminution of its commitment to maintain a highly accommodative monetary policy for as long as needed.” He cited payroll employment rising by 7.5M since 2010 & the economy growing in 16 of the 17 qtrs after the recession ended as evidence the his policies have succeeded. “The economy has made considerable progress since the recovery officially began some four and a half years ago.” “When the economy was in free fall in late 2008 and early 2009, such improvement was far from certain, as indicated at the time by stock prices that were nearly 60 percent below current levels and very wide credit spreads,” Bernanke said. One more indication of further tapering.
Bernanke Sees Headwinds Fading as U.S. Poised to Grow
Stocks closed the week mixed to higher on low volume. There was not a lot going on, but next week there will be more news events to drive the markets. The big storm in the eastern US will crimp retail sales which have been lackluster in the last weeks of 2013. The 10 year Treasury yield back at 3% will result in higher mortgage rates, a damper on new housing construction. Apple (AAPL) lost 10, a major drag for NAZ today. Dow is down 106 in the first 2 trading days of the new year.
Dow Jones Industrials
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