Bartlett Market Week
Market Week: April 05, 2010
The Markets
So far, so good: The new quarter got off to an optimistic start. The domestic equities indexes were up across the board for the holiday-shortened week. For the third week in a row, blue chips continued to get some love and hold their own with the small caps, while the Nasdaq fell to the rear for a change. The U.S. Treasury 10-year yield saw its third weekly increase; during Friday's half-day of trading, it jumped seven basis points to end just under the closely watched four percent mark.
Note: Market indexes listed are unmanaged and are not available for direct investment.
Last Week's Headlines
- March was the fifth straight month of either improvement or stabilization in the employment picture. Though the unemployment rate remained at 9.7%, nonfarm payrolls added 162,000 jobs. Even without the 48,000 temporary jobs created to help with the 2010 census, it's the largest increase in jobs since 2007. However, roughly 44% of unemployed workers have been out of work for at least 27 weeks, a new high. And including people who have given up on their job search or who work part-time because they can't find full-time work puts the un/underemployment figure at 17.5%.
- Consumers spent more and saved less in February, according to the Commerce Department. Consumer spending was up 0.3%, while savings slowed to 3.1% of income (compared to 3.4% in January and 4% in December). However, personal income was basically flat, increasing less than 0.1%.
- Home prices in the 20 metropolitan areas measured by the S&P/Case-Shiller Price Index rose slightly in January compared to the previous month, but were down 0.7% from a year earlier.
- Factory orders rose 0.6% in February as companies continued to replenish inventories, according to the Commerce Department. Also, U.S. manufacturing expanded in March for the eighth month in a row. The Institute for Supply Management said the 3.1% increase represented the fastest rate of growth since July 2004.
- As scheduled, the Federal Reserve Board ended its program of buying mortgage-backed securities, designed to help keep mortgage rates affordable during the credit crisis.
Eye on the Week Ahead
With the Dow nearing 11,000, Friday's unemployment numbers will likely drive trading early in the week. The bond markets face yet another wave of Treasury auctions, including TIPS and 30-year bonds, and will watch to see if the Fed increases the discount rate for banks again. It's also the last week before first-quarter earnings announcements kick off with Alcoa on April 12.
Key data releases: Pending home sales, ISM services sector (4/5); FOMC minutes (4/6); consumer credit (4/7).
Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.
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