The only follow-through from yesterday’s rare
The only follow-through from yesterday’s rare bout of weakness came early this morning, as sovereign credit concerns regarding Greece once again made headlines and spooked US equity investors for the first ten minutes of the session. Greek bonds declined for a seventh consecutive session and credit-default swaps on Greece’s government debt continued to soar. The fact that the cost of insuring Greek bonds has climbed to a record high again weakened the euro, thus driving the US dollar higher.
The press also attributes some of the early weakness to the newest Labor Department data on initial jobless claims. These rose unexpectedly by 18,000 to a total of 460,000 last week (consensus estimate: a decline to 435,000 claims). Meanwhile, continuing claims declined by 131,000, thus coming in at a better-than-expected 4.55 million.
From the retail sector, a number of strong same-store sales emerged, as well as a number of upside earnings surprises. Retailers thus outperformed the market and ended the day with a gain of 1.3%. Target and Gap each rallied some two percent after results show March 2010 was the strongest March (in terms of sales gains) in more than a decade.
A potential large merger was reported from the airlines sector. US Airways may decide to merge with UAL (United), potentially creating the second-largest US carrier. The news pushed the Amex Airline Index to a new yearly high.
Key economic data for the week starting April 5, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.
| Friday: | |
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10:00 AM WHOLESALE INVENTORIES M/M (Feb): 0.4% / -0.1% |
