It's The Economy Stupid: Market Close

Description	Ticker	Last	CHANGE	% Chg Today	Pct Chg 1Yr
STOCK MARKETS
Dow Jones Industrial Average	INDU Index	14700.800	24.5000	0.1669	12.4322
S&P 500 Index	SPX Index	1585.160	6.3700	0.4035	13.9590
S&P 400 Mid Cap Index	MID Index	1146.340	6.0900	0.5341	16.4048
S&P 600 Small Cap Index	SML Index	466.570	-2.3100	-0.4900	15.2095
NASDAQ 100 Index	NDX Index	2848.655	14.5370	0.5129	5.1446
NASDAQ Composite Index	CCMP Index	3289.986	20.3340	0.6219	8.7374
Russell 3000 Index	RAY Index	942.160	4.1800	0.4456	14.5707
Russell 1000 Index (Large Cap)	RIY Index	879.700	3.7500	0.4281	14.4352
Russell 2000 Index (Small Cap)	RTY Index	940.280	6.1700	0.6605	15.8979
Wilshire 5000 Total Market	W5000 Index	16733.230	76.9300	0.4619	14.7468
TREASURIES	% Yield
3 Month Treasury	0.0558		0.0000	0.0000
6 Month Treasury	0.0862		0.0000	0.0000
2 Year Treasury	0.2269	99.797	0.0000	0.0000
5 Year Treasury	0.7110	99.586	0.0039	0.0039
10 Year Treasury	1.7115	102.625	-0.0313	-0.0304
30 Year Treasury	2.9106	104.359	-0.2031	-0.1943
ENERGY
Crude Oil, Brent Index	Brent Crude	103.220	1.4900	1.4647	-8.8940
Crude Oil, Louisiana Lt. Sweet	LA Lt Sweet	105.040	2.9800	2.9199	-13.6400
Natural Gas, Henry Hub Index	Nat Gas	4.161	-0.0050	-0.1200	29.1887
PRECIOUS METALS
Spot Gold $/oz	GOLD	1465.380	33.4300	2.3346	-10.8863
Spot Silver $/oz	SILVER	24.327	1.1410	4.9211	-21.0436
CURRENCIES
Euro	EUR Curncy	1.301	-0.0008	-0.0615	-1.6267
Japanese Yen	JPY Curncy	99.350	-0.1600	-0.1608	-18.1031
British Pound	GBP Curncy	1.543	0.0161	1.0544	-4.5474
Swiss Franc	CHF Curncy	0.945	-0.0012	-0.1268	-3.7778
Canadian Dollar	CAD Curncy	1.021	-0.0050	-0.4875	-3.6449
Chinese Yuan	CNY Curncy	6.171	-0.0074	-0.1198	2.2088
FOREIGN INDICIES
FTSE 100 INDEX	UK	6442.590	10.8300	0.1684	12.6546
CAC 40 INDEX	FRANCE	3840.470	-2.4700	-0.0643	18.7728
DAX INDEX	GERMANY	7832.860	73.8300	0.9515	16.8299
NIKKEI 225 INDEX	JAPAN	13926.080	82.6200	0.5968	45.6424
HANG SENG INDEX	HONG KONG	22401.240	218.1900	0.9836	7.6480

 

 

 

 

 

 

 

 

 

 

 

 

FW: Yes it was GOOD news

ZEROSese Definitions

Spoos - S&P 500 futures
QE - Quantitative Easing
ECB - European Central Bank
BoJ - Bank of Japan
G20 - Group of 20 nations finance ministers and central bankers
MRO - Main Refinancing Rate of the European Central Bank, their one week rate
USDJPY - US Dollar/Japanese Yen exchange rate
EM not DM - Emerging Market not Developed Market


-----Original Message-----
From: DAVID ZERVOS (JEFFERIES LLC)
Sent: Thursday, April 25, 2013 10:59 AM
To: John Broussard
Subject: Yes it was GOOD news

So the verdict is in. Gold is settling down 8 to 10 percent from its pre-crash levels and the world feels mighty fine. Spoos are a few ticks from record highs and the Nikkei is moeteimasu!! So much for the endless stream of comments suggesting that because of a Gold crash all leverage will be purged from the system. Yes gold collapsed. And since 2010, Gold has consistently traded above spoos, sometimes by hundreds of points. But this is a crash back to reality - a cathartic move that is importantly NOT a sign of global deflationary Armageddon. Its a sign that a bunch of misguided hyperinflation focused investors were carted out. FINALLY!

In fact, most of the old spoo haters from 2009-2011 stopped out of their 600 forecasts and turned towards 10,000 gold forecasts. Deflationists turned hyerinflatioists in an instant. These people are simply not happy unless something is blowing up!! And of course the only thing thus far that has truly blown up is their pnl.

Let's review reality quickly. The base case is that QE will work. QE will drive risk taking and investment in real economic activity. It will raise depressed animal spirits. It will also reflate assets that were driven to depressed levels and deflate the real value of our debt overhang. It will repair distressed levered balance sheets. Of course there will be some fallout. Those who choose fooloishly to own low yielding debt instruments will be financially repressed into poverty. And on the other side, those who invest in real/productive equity capital will be reflated into prosperity. Its a simple formula!!

And just to make sure everyone is fully aware of where our major central banks are headed - last week the G20 gave the BoJ the green to go loco; Bullard, Lacker and Kotcherlakota opened the door for "reverse tapering"; and the German uber hawk Weidmann opened up a possible MRO cut. The central bank reflationary accelerator is pressed to the floor in developed markets! And while we always have to watch the Europeans in case they try to start spreading Cyphilis again, the best news of the last few weeks is actually the German economic slowdown. A weak Germany will force the ECB to move in the right direction. So we can thank Kuroda for not only starting to finally fix Japan, but also for competitively devaluing against the German export machine and forcing them to capitulate on foolishly tight monetary policy.

I'll sign off for now as I'm jammed on the road and writing between meetings (apologies for any typos). But I will leave today with a preview of what I'm writing about next. The developed market central banks will solve many of their own problems through expansionary monetary policy. And there will surely be some long term inflationary consequences - nothing too frightening, but UK style 5 handles may haunt us for a while down the road in a few years. But the cause for concern in these policies does not rest in developed markets. When the Japanese took USDJPY from 80 in 1995 to 140 in 1998 they left a trail of destruction in emerging markets. The next worry is in EM not DM! Be careful. Good luck trading.

FW: Bridgewater Daily Observations - "Early Signs of Business Investment Slowing"

Bridgewater Daily Observations

Early Signs of Business Investment Slowing

Business fixed investment looks like it is slowing and may become somewhat of a drag on US growth in the coming months. There have been several indications of this: Wednesday's durable goods report was soft, corporate comments on investment plans have become more negative as sales stagnated in the first quarter, and most surveys on business investment plans are also pointing to a slowdown. Pro-cyclical capex providers continue to underperform the broader market even as stocks as a whole make new highs, suggesting that while abundant liquidity is finding its way into the overall market, less is finding its way into the real economy.

At this point in the expansion, levels of investment have largely normalized and businesses in most sectors are operating close to capacity. Accordingly, it makes sense that business spending growth should roughly track underlying demand growth (both external and domestic). Recently, the slowdown in global sources of demand appears to be a significant source of the weakness we've been seeing related to business investment plans. External demand, along with overall trading partner growth, has been weakening over the past several months and is now mediocre. Consistent with this deterioration, companies that have a more significant exposure to foreign demand have been underperforming the overall market. Meanwhile, domestic demand, which had been accelerating, softened a bit most recently and faces short-term headwinds related to fiscal tightening. So while we still expect to see healthy business fixed investment numbers for the first quarter (as a result of strong shipments earlier in the year), the soft March report on durable goods looks more in line with the rest of the evidence we're seeing, which is all pointing to a moderation in business fixed investment.

It's The Economy Stupid: Jobless Claims

Economic Event	Period	Economic Survey	Actual Reported	Original Prior	Revised Prior
Initial Jobless Claims	APR 20	350K	339K	352K	355K
Continuing Claims	APR 13	3060K	3000K	3068K	3093K

 

Initial Jobless Claims in U.S. Fall 16,000 Last Week to 339,000

 

Fewer Americans than forecast filed first-time claims for unemployment insurance payments last week, pointing to an improving labor market.

 

Applications for jobless benefits decreased by 16,000 to 339,000 in the week ended April 20, the lowest since March 9.  Economists projected 350,000 claims, according to the median estimate in a Bloomberg survey.  Jobless Claims data typically bounce around this time of year.       The figures indicate companies have enough confidence to maintain current staffing levels and are in a position to add to headcount should sales strengthen. At the same time, recent data showing the economy began to cool at the end of the first quarter give businesses reason to pause, prolonging the time it takes joblessness to retreat to pre-recession levels.

 

Estimates for first-time claims ranged from 340,000 to 370,000 in the Bloomberg survey of 49 economists. The Labor Department revised the previous week’s figure up to 355,000, from an initially reported 352,000.  While a Labor Department spokesman said there was nothing unusual that affected today’s figures, he said big swings in claims are common this month because of layoffs related to

school vacations and holidays such as Easter that don’t always occur during the same week each year. He also said the period of

swings in unadjusted data should be coming to an end.

 

The four-week moving average of claims, a less-volatile measure, fell to 357,500 from 362,000. The number of people continuing to collect jobless benefits fell by 93,000 to 3 million in the week ended April 13, the lowest since May 2008. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.

 

     Those who’ve used up their traditional benefits and are now collecting emergency and extended payments rose by about 7,600

to 1.79 million in the week ended April 6. The unemployment rate among people eligible for benefits fell to 2.3 percent in the week ended April 13.

 

Next week, the Labor Department will release April’s report on the U.S. employment situation. Economists in a Bloomberg survey forecast the labor market regained some ground, with payrolls expanding by 155,000 after an 88,000 a month earlier.  In the six months ended in March, employment averaged 188,000.

 

 

 

 

 

 

Bridgewater Daily Observations - Global Growth Divergences

Bridgewater Daily Observations

 

Global Growth Divergences

 

We are now about five years past the global financial crisis, and while global growth rates and levels of activity are fairly normal in aggregate, differences in policy choices as well as where various countries are in their respective long-term debt cycles continue to produce meaningfully different economic outcomes:

 

• In the US, private sector conditions are gradually normalizing as balance sheets continue to heal. Growth is above potential, levels of activity have improved substantially, and inflation remains stable and average. As the fiscal drag fades later this year, the Fed may be able to start gradually pulling back stimulation.

 

• Japan has been stuck in an ugly deflationary deleveraging for 20 years, but recent monetary and fiscal policy shifts may finally allow Japan to break its deflationary cycle. Growth has recently accelerated and policy makers appear ready to do more if needed.

 

• Euroland has been contracting for a year and a half, though there has been some recent improvement as acute financial pressures have eased. Levels of activity remain depressed and inflation is both low and falling. Economic conditions in Euroland remain weak enough to justify additional stimulation.

 

• Chinese growth accelerated meaningfully late last year in the context of already elevated levels of activity, which (along with the bounce in the US) helped support aggregate global growth. More recently, Chinese growth has moderated some and is now close to potential.

 

• Growth in the rest of the emerging world has slowed relative to earlier in the current expansion despite a high degree of stimulation. EM central banks are in a position to ease further if necessary, and households are in a position to respond given their relatively low debt burdens.

 

It's The Economy Stupid: A Swing And A Miss

Economic Event	Period	Economic Survey	Actual Reported	Original Prior	Revised Prior
Durable Goods Orders	MAR	-3.0%	-5.7%	5.7%	4.3%
Durables Ex Transportation	MAR	0.5%	-1.4%	-0.5%	-1.7%
Cap Goods Orders Non Def Ex Air	MAR	0.3%	0.2%	-2.7%	-4.8%
Cap Goods Ship Non Def Ex Air	MAR	0.8%	0.3%	-1.9%	1.2%
MBA Mortgage Applications	APR 19		0.2%	4.8%

 

 

Batter, batter, batter, swing batter!  It’s a swing and a miss! 

 

Orders for U.S. Durable Goods Decline by Most Since August 2012

 

Seems as though Durable Goods are not so durable after all. I am not sure which was worse, the numbers that were reported or the economists that tried to estimate what the numbers were going to be.

 

Orders for U.S. durable goods fell in March by the most in seven months as demand slumped for commercial aircraft and business investment cooled.

 

Bookings for goods meant to last at least three years decreased 5.7 percent after a revised 4.3 percent gain the prior month that was smaller than previously estimated, the Commerce Department reported today in Washington. The median forecast of 78 economists surveyed by Bloomberg called for a 3 percent decline. Orders excluding transportation equipment, which is volatile month to month, unexpectedly fell for a second month.

 

Weakness in overseas markets and lower commodities prices have slowed demand for some companies such as Caterpillar Inc.,

showing manufacturing cooled as the first quarter drew to a close. At the same time, sustained motor vehicle sales and a

pickup in the housing market may help keep production from faltering.

 

Orders declined in March for metals, machinery and electrical equipment, today’s figures showed. Estimates for durable goods in the Bloomberg survey ranged from a drop of 6 percent to a 1 percent gain after a previously reported February gain of 5.6 percent.

 

Stock-index futures erased gains after the figures, with the contract on the Standard & Poor’s 500 Index expiring in June declining 0.1 percent to 1,572.7 at 8:37 a.m. in New York.

 

 

 

 

Associated Press Twitter Account Hacked

 

 

Picture of Dow Jones Industrial Average Index today.  Someone hacked the Associated Press’ Twitter account and sent out a fake news flash around 12:15 PM saying the White House had been attached and President Obama wounded.

 

The market dropped about 150 points in seconds until officials denied the tweet.