MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Friday, May 24, 2013
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11:46 AM Iranian hackers have escalated a campaign of cyberassaults against U.S. companies and were able to gain access to control-system software that could allow them to manipulate oil or gas pipelines, proceeding "far enough to worry people," WSJ reports. Sources don't name the companies targeted but were energy companies along the Canadian border, where many firms have operations. 2 Comments
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8:31 AM Apr. Durable Goods: +3.3% vs. +1.1% expected, -5.9% prior (revised). Ex-transport +1.3% vs. +0.4% expected, -1.7% prior (revised). Comment!
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Thursday, May 23, 2013
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10:51 AM Mortgage rates rise for the third straight week, according to Freddie Mac's weekly survey. The 30-year fixed-rate mortgage averaged 3.59%, up from last week's 3.51%, while the 15-year fixed averaged 2.77% vs. 2.69% a week ago. The respective rates were 3.78% and 3.04% a year ago. Comment!
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10:07 AM More on New Home Sales: The March print was revised sharply higher - to 444K from 417K. April sales were 2.3% higher than March and 29% higher than a year ago. The median sales price was $271.6K, the average $330.8K. Inventory stands at 156K, representing a supply of 4.1 months. Homebuilders ETF (XHB -0.4%). (full report) Comment!
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9:45 AM The Bloomberg Consumer Comfort Index rises to -29.4 from -30.2 last week. Notably, the index climbed to -20.7 among homeowners, the highest level since January 2008 and 24 points higher than the level among renters. For the first time since November 2007, those earning $75K-$100K have joined those earning more than $100K in reporting a positive index score. Comment!
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8:40 AM More on jobless claims: The big decline nearly erases last week's large and unexpected jump, and will do nothing to ease concern about "tapering." The 4-week moving average is little-changed at 339,500. S&P 500 futures remain lower by 0.95%, but bond prices continue to give up some of their big early gains, TLT +0.3%. 3 Comments
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8:30 AM Initial Jobless Claims: -23K to 340K vs. 345K consensus, 363K prior (revised). Continuing claims -112K to 2.91M. 6 Comments
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Wednesday, May 22, 2013
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5:47 PM While pundits parse Bernanke and the FOMC minutes, Jon Hilsenrath is advising Fed-watchers to expect less "tapering" talk from now on and more standalone steps to test market reactions and enable flexible follow-up measures: "The Fed effectively wants the markets to experience the same uncertainty it experiences... and it wants to condition the market to avoid jumping to conclusions about what it will do next." Comment!
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3:23 PM Treasury yields continue to climb following the hawkish interpretation of Bernanke and FOMC minutes, the 10-year up 9 bps to 2.02% and within 6 bps of the YTD high of 2.08%. Yields will fluctuate at the long end, but the middle is moving as well, the 5-year up 7 bps to 0.89% - quite a spike for an instrument yielding so little. The IEI - which owns 3-7 year Treasury paper slides 0.3% to just about a 52-week low. The long-term TLT falls 1.4%. 6 Comments
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2:04 PM FOMC Minutes: A "number" on the FOMC favored beginning a tapering of QE as early as June, but the committee as a whole decided more progress on the economy is needed first. A few participants expressed concern inflation is under target and say future price developments must be carefully watched. One member wanted to boost asset purchases, while one wanted tapering to begin immediately. 12 Comments
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10:25 AM More from Bernanke: "Another cost, one that we take very seriously, is the possibility that very low interest rates, if maintained too long, could undermine financial stability ... (however) a premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery." Questioning is about to begin. S&P 500 +0.9%. 5 Comments
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10:03 AM Bernanke Congressional Testimony: Premature tightening risks choking off the economic recovery, says Bernanke in prepared remarks, and the FOMC stands ready to increase or decrease QE as necessary. Watch live here. 11 Comments
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7:42 AM FRBNY Bill Dudley says it will be 3-4 months before the Fed will have a sense of how the economy is responding to fiscal drag and can decide whether to reduce (or expand?) asset purchases. Speaking to Bloomberg, Dudley says the FOMC has yet to get to a point of agreeing on a strategy for cutting back QE. Three-four months? ... Should make Bernanke's Jackson Hole speech an interesting one. 9 Comments
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Tuesday, May 21, 2013
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8:28 PM After five days of deliberation, the Senate Judiciary Committee puts its final stamp of approval on the immigration reform bill, setting up a debate on the Senate floor for early June. Three Republicans and ten Democrats voted to support the bill, which would create a pathway to citizenship for nearly 11M undocumented immigrants, invest billions in new border security measures and overhaul the legal immigration system. 13 Comments
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1:08 PM That QE taper may end up being a QE expansion as FRBNY President Bill Dudley tells a gathering in Japan the uncertain economic outlook has him unsure if the next move will be up or down. He worries about investor over-reaction to a "normalization" of policy and suggests the FOMC may need to update what it needs to see to move in that direction. Stocks like the "up" talk, the S&P 500 (SPY +0.4%) at a fresh session high. 29 Comments
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12:58 PM The Fed should continue with QE, says St. Louis Fed chief Bullard, as the reaction in financial markets (stocks higher?) proves the purchases have been effective. He says the program should be adjusted (higher or lower) based on incoming economic data. He tosses out negative interest rates as a possible policy (why not), but suggests the effects of such a move would be minor. 4 Comments
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