Welcome back, Goldilocks
The Goldilocks consensus—that the economy is set to run not so weak that revenue and earnings won’t grow in the second quarter but not so strong that the Federal Reserve will speed up its taper—is back.
Why the stock market shrugged off yesterday’s GDP drop
A big drop in inventories, a signal of pent up demand in the economy, took the sting out of revisions to first quarter GDP growth (announced on May 29) that showed the U.S. economy contracting for the first time since the last quarter of 2011. GDP fell at a 1% annualized rate
New homes sales strong enough for a new try at 1900
U.S. stocks inched higher today continuing a recent pattern of drifting upwards without a big show of enthusiasm. The catalyst today was good news—solidly good news—on sales of new homes in April. The annualized rate jumped to 433,000, up 6.4% from March
Money moves out of U.S. stocks to the sidelines
So where is the cash headed? It’s coming out of U.S. equities right now and moving to the sidelines. That’s only a temporary destination, however.
New housing starts up but not by enough to remove worries about sector
After Fed chair Janet Yellen warned last week that “The recent flattening out in housing activity could prove more protracted than currently expected,” I was hoping that today’s numbers on new housing starts and building permits would show that the Fed’s worries were overblown. Nope.
Bond market reaction to ok U.S. data scares stocks into drop
What seems to have spooked the stock market is the bond market’s response to the good news on initial claims. With the economy showing more strength than expected bonds should have sold off. But exactly the opposite happened
Saturday Night Quarterback says, For the week ahead expect…
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Initial claims for unemployment bounce back from last week’s scare.
Last week the numbers for initial claims for unemployment threw a scare into the financial markets and economists when they showed a strong bump upwards to 344,000 new claims filed for the week. The likelihood was that this was just the usual Easter-related noise in the data but investors and traders could not absolutely rule out the possibility that the labor market had worsened.
For once, unambiguous good news on the U.S. economy
Tighter credit policies have been a drag on the U.S. economic recovery. But according to the Federal Reserve’s most recent survey, banks eased lending policies for commercial and industrial loans in the first quarter. For individuals, the Fed found easing in policies for consumer credit card and auto loans and a mixed picture for prime mortgages and home equity lines of credit
Saturday Night Quarterback says, for the week ahead expect…
To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing with one of our special offers it will be lower) for a year for ongoing and continuing access to the...Really whacky jobs numbers leave market guessing
The payrolls number shows that the economy added 288,000 jobs in April. That’s a huge piece of good news. But workers fled the workforce in huge numbers with the labor force dropping by 806,000 in the month. That had the effect of lowering the unemployment rate to 6.3% from 6.7% in March. But the number of people actually working in the U.S. economy fell by 73,000.
Where’s the post-winter-weather bounce? Not in construction spending growth of just 0.2% in March
Yet another number this morning without anything resembling a make-up increase in activity after the winter weather. Construction spending increased just 0.2% in March. That is an improvement from the 0.2% decline in February. But economists had expected construction spending to rise by 0.4% in March.
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