Tech issues outperformed again today in a very
Tech issues outperformed again today in a very slow session marked by anemic volume and decreasing volatility. Because of a lack of corporate news releases, investors focused largely on economic data releases.
The Labor Department reported a larger-than-expected decline in initial jobless claims (newly laid-off workers filing claims for unemployment). Compared to the previous week, these dropped from 480,000 to 450,000, better than the consensus estimate of 470,000. Although the labor market overall is still considered to be weak, today’s data is encouraging as initial jobless claims are now at their lowest level since the fall of 2008. However, the impact of temporary holiday employment is hard to gauge and factor into seasonal adjustments. According to economists, initial claims numbers consistently below 425,000 (for at least several weeks) would be required in order to signal a stronger labor market (and an economy that is actually generating new jobs rather than just losing employment at a lesser rate).
The Commerce Department reported that big-ticket durable goods orders to US factories were up 0.2% in November. While the overall increase was below economists” expectations (for a 0.5% gain), orders were up 2% when transportation orders are excluded. Transportation suffered from a plunge in commercial aircraft orders and from slumping demand for motor vehicle parts. More orders however came from other sectors such as machinery, primary metals, as well as from computers and electronic products.
Two signs of more lingering aftereffects from the financial crisis / recession: In a rare Christmas Eve vote in the Senate, the US government debt ceiling has been raised by $290 billion to a total of $12.4 trillion. Further, the Treasury Department announced that it has removed a $400 billion financial cap on the money it is willing to lend to keep certain companies in business. Instead of capping the amount of funds it provides, the Treasury Department said it will start using a more flexible formula, basing the amount of support on how much a firm loses per quarter. Beleaguered mortgage guarantors Fannie Mae and Freddie Mac (who purchase home loans from lenders and sell them to investors) are key beneficiaries of the changed procedures. Fannie Mae and Freddie Mac together own / guarantee close to 31 million home loans worth about $5.5 trillion, equating to roughly half of all US mortgages.
Key economic data for the week starting December 28, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.
| Tuesday: | |
 |
9:00 AM S&P CASE SHILLER INDEX (Oct): 146.8 / 146.5
S&P CASE SHILLER Y/Y (Oct): -7.3% / -9.4% 10:00 AM CONF.BOARD CONSUMER CONFIDENCE (Dec): 52.9 / 49.5 |
| Wednesday: | |
|
9:45 AM CHICAGO PMI (Dec): 55.6 / 56.1 |
| Thursday: | |
|
8:30 AM CONTINUING CLAIMS Dec-19: 5170K / 5186K
INITIAL CLAIMS Dec-26: 470K / 480K |
| Friday: | |
|
Markets closed for New Year’s Day |
By noreply@noemail.com (HGH Press)
