Bartlett Market Week
Market Week: April 26, 2010
The Markets
Equities markets may have been knocked down initially by the SEC's charges against Goldman Sachs, but last week's broad rebound was as robust as first-quarter profits for Goldman and other financials that reported earnings last week. Small caps once again took the lead as corporate earnings reports were generally encouraging and good economic news suggested the housing market might be emerging from its coma.
Note: Market indexes listed are unmanaged and are not available for direct investment.
Last Week's Headlines
- Though consumer costs remain contained, inflation at the wholesale level jumped 0.7% during March, according to the Bureau of Labor Statistics. That represents a 6% increase from last March--the biggest year-over-year increase since September of 2008. Rising prices hit hardest at the earliest stage of production; crude goods such as agricultural products and iron were up 3.2%.
- With time running out to qualify for the homebuyer tax credit, home resales were up 6.8% in March, and up 16% from a year ago. The National Association of Realtors® said distressed properties represented 35% of sales, and 44% of home buyers were first-timers. Meanwhile, new home sales were up a buoyant 26.9% from February.
- After three months of increases, durable goods orders were down in March, hit by reduced spending on nondefense transportation equipment such as aircraft parts.
- Greece got a double dose of bad news (triple if you count the strike by civil servants protesting budget cuts). The agency responsible for European economic statistics said Greece's budget deficit might be even bigger than previously believed. Moody's immediately downgraded the country's sovereign debt from A2 to A3 and said additional downgrades are likely, making it even more difficult for Greece to attract private investment to avoid default on 8.5 billion euros' worth of principal due May 19. As a result, Athens finally said it would need to tap the line of credit from its eurozone colleagues and the International Monetary Fund.
- As planes took to the skies around the globe once again, the International Air Transport Association estimated the cost of the Icelandic volcano travel chaos at $1.7 billion--and that's just the impact on the airlines.
Eye on the Week Ahead
On tap are more earnings reports, more debate on financial reform, and more congressional inquiries into financial shenanigans. Any change in the Fed's "extended period" language about interest rates would get a lot of attention, and first-quarter gross domestic product (GDP) will give further clues to the state of the economy.
Key data releases: Home prices, consumer confidence (4/27); FOMC announcement (4/28); Q1 GDP estimate, employment costs, consumer sentiment (4/30).
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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