Market Recap 05.04.00

Economic Data

US:MBA Purchase Applications

Purchase Index - W/W Change	Prev         -13.6 %	Act 0.3 %
Refinance Index - W/W Change	-0.6 %	6.0 %
Composite Index - W/W Change	-5.6 %	4.0 %

US:Challenger Job-Cut Report

Announced Layoffs - Level

Prev 41,528

Act  36,490

US:ADP Employment Report

ADP employment

Prev 201,000

Rev 207,000

Act  179,000

 US:ISM Non-Mfg Index

http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-05-04-18-36-39

 US:EIA Petroleum Status Report   EIA Petroleum Data Viewable Here

Highlights of EIA Report http://tonto.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/pdf/highlights.pdf

PLATTS analysis of US EIA data: US oil demand drops sharply for week ended April 29

http://www.platts.com/PressReleases/2011/050411b

CFTC “This Month In Futures Markets for April 2011”

http://www.cftc.gov/oce/web/index.htm

Market Data

Worries that China may raise interest rates again was an important factor in today’s market activity.

 http://www.automatedtrader.net/real-time-news/76076/china-pboc-hints-at-more-tightening-as-global-inflation-rises

Financials+0.18%     

US+0.38% TY+0.15% FV+0.03%    ED+0.01% TU+0.01%

http://www.reuters.com/article/2011/05/04/usa-fed-lockhart-idUSEBE7DA0020110504

Currencies-0.09%

JY+0.44% BP+0.20% EC+0.11% SF+0.02% USD-0.06% MP-0.44% CD-0.46% AD-0.85%

http://www.bloomberg.com/news/2011-05-04/switzerland-s-franc-rises-to-record-versus-dollar-on-rate-stock-outlook.html

Indices-0.52%

NQ-0.06% YM -0.56% ES-0.57% EW-0.74% RJ -1.03%

http://www.reuters.com/article/2011/05/04/us-markets-stocks-idUSTRE74120Z20110504

Energies-0.85%

ZK+1.11% RB-0.47% HO-1.70% CL-1.96% NG-2.08%           

http://www.bloomberg.com/news/2011-05-04/crude-oil-declines-a-third-day-in-new-york-after-u-s-inventories-increase.html

Grains-1.06%

C+0.79% O+0.58% SM-0.68% S-0.86% BO-0.94% RS-1.44% W-2.68% RR-3.25%

http://www.cmegroup.com/education/market-commentary/ag/2011/05/recap-wheat_138.html

Softs-2.84%

OJ-0.23% CC-1.83% SB-3.17% KC-3.81% CT-3.81% LB-4.18%

http://www.bloomberg.com/news/2011-05-04/sugar-falls-for-a-fifth-day-on-thai-output-china-inflation-coffee-drops.html

Metals-3.36%

GC-1.66% PL-1.74% HG-3.01%  PA-4.44% SI-7.67%

http://www.reuters.com/article/2011/05/04/businesspro-us-markets-silver-slide-idUSTRE7437XU20110504

Market Report for 04.27.11

 Economic Activity

Durable Goods Orders

New Orders - M/M change	Prev   -0.9 %	Revised 0.7 %	Est 1.9 %	Range 0.5 % to 3.0 %	Act 2.5 %
New Orders - Yr/Yr Change	6.2 %	8.0 %			10.5 %
Ex-transportation - M/M	-0.6 %	0.6 %			1.3 %
Ex-transportation - Yr/Yr	8.5 %	9.9 %			6.1 %

EIA Petroleum Status Report

Crude +6.2m bbls

Gasoline -2.5m bbls

Distillates -1.8m bbls

Oil imports averaged 9.3m bbls /day vs 4wk avg of 8.7m bbl/day

Refinery are running at 82.7% of capacity

Gasoline demand 1.6% below year-ago levels

Distillate demand is up 7.3% from last year

Jet-fuel demand is up 4.4%

Oil Stocks

Refinery Utilization Rate

Gasoline Supplies

Crude Inventories are running on the high side of their average range
While gasoline supplies are low.  Oil refineries are operating at 82.7% of capacity.

Meanwhile, firms like BP and Conoco are reporting quarterly earnings of $5.37 BILLION and $3.0 BILLION respectively.

The “This Week in Petroleum” report shows that domestic oil production is increasing over the last two years after declining for the past couple of decades.

http://tonto.eia.doe.gov/oog/info/twip/twip.asp

FOMC Meeting Announcement

http://www.federalreserve.gov/newsevents/press/monetary/20110427a.htm

Federal Funds Rate - Target Level

Prior 0 to 0.25 %

Est 0 to 0.25 %

Act 0 to 0.25 %

Unanimous vote to keep the target rate at this extremely low level for an extended period.

Economic recovery is proceeding at a moderate pace and conditions in the labor market are improving gradually.

The following link shows adjustments made to estimates of growth and inflation.

http://www.federalreserve.gov/newsevents/press/monetary/fomcprojtabl20110427.pdf

Market Activity

Metals+2.02%

SI+6.65% GC+1.72% PA+1.31% PL+1.24% HG-1.38%

COMEX silver stocks are at a 5yr low.

http://www.bloomberg.com/apps/quote?ticker=COMXSIL:IND

25 year Gold Bullion chart

Indices+0.99% CRB -0.30% VIX -1.45%

NQ+1.13% YM+1.05% RK+1.04%  EW+0.90% ES+0.89%

http://www.bloomberg.com/news/2011-04-27/u-s-stock-futures-rise-before-fed-johnson-johnson-climbs.html

Energies+0.56%

RB+2.50% CL+1.01% HO+0.99% ZK-0.38% NG-0.79%

Gasoline imports from Europe decline:

http://www.bloomberg.com/news/2011-04-26/u-s-gasoline-imports-from-europe-may-drop-to-four-month-low-on-pricing.html

Weekly Gasoline Chart

           

Currencies+0.32%

EC+1.05% BP+0.94% AD+0.87% SF+0.44% MP+0.41% CD+0.26% JY-0.55% USD-0.74%

http://www.bloomberg.com/news/2011-04-26/dollar-falls-to-16-month-low-against-euro-amid-speculation-of-fed-support.html

25 year USD Chart

Financials-0.20%

FY+0.05% TU+0.02% ED+0.01% TY-0.09% US-0.46%

http://hosted.ap.org/dynamic/stories/U/US_FEDERAL_RESERVE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-04-27-15-20-50

Softs-0.36%

CC+2.40% OJ+2.17%            KC+0.20% SB-1.56% LB-1.56% CT-3.82%

Cotton supplies rose 2.5% from the previous day. The May contract, which is now the spot contract, was down almost 5.5% on the low of the day

Grains-1.70%

RS+0.28% BO-0.33% S-0.34% SM-0.86% RR-1.18% C-1.83% W-4.22% O-5.13%

http://www.bloomberg.com/news/2011-04-27/grains-soybeans-decline-on-concern-fed-may-ease-stimulus-curbing-demand.html

#1) MBA Purchase Applications   

_________________________Prior__________Actual

Purchase Index - W/W Change---------	-1.4 %	-5.9 %
Refinance Index - W/W Change	-7.7 %	-11.4 %
Composite Index - W/W Change	-5.5 %	-9.5 %

Rising interest rates caused refinancing activity to drop to is lowest level in 2-1/2  years. The 30yr mortgage rate is 5.12% 

#2) Housing Starts

                    Prior___Est____Act

Starts -	0.520m	0.540m	0.596m
Permits -	0.635m		0.562m

Mixed results: Starts increased versus Permits falling

Starts by region: Northeast +41.8% Midwest +36.4% South +15.8% and West -9.7%

Starts - 

0.520m

0.540m

0.596m 

Permits - 

0.635m

0.562m

#3) PPI

___Prior____Est___Act

PPI - M/M change	0.9 %	0.8 %	0.8 %
PPI less food & energy - M/M change	0.2 %	0.2 %	0.5 %

Headline and core numbers show signs that inflation is picking up.

PPI - M/M change

0.9 %

0.8 %

0.8 %

PPI less food & energy - M/M change

0.2 %

0.2 %

0.5 %

#4)This Week in Petroleum (Click to view report) 

(Click to view Data)

#5) FOMC Minutes

The pace and magnitude of improvements in the labor markets continues to disappoint the FED. Economic growth prospects for 2011 were seen as improving but they see little change in the employment and inflation picture 

Home Purchase Applications For wk1/21, 2011

__________________________Prior __Actual

Purchase Index - W/W Change -1.9 % -8.7 %

Refinance Index - W/W Change 7.7 % -15.3 %
Composite Index - W/W Change 5.0 % -12.9 %
Bad weather and a holiday shortened week was thought to the reasons behind the sharp drop in these home financing indexes.

New Home Sales For wk1/21, 2011

_____________Prior __Est___ActualHome Sales     280k     300k    329k



 EIA Weekly Petroleum Report


Crude Oil Supplies as of 1/21/11
340.6 up 4.8 for the week Up 13.9 from yr-ago
Crude Oil Prices
89.11 Down 2.43 for the week Up 14.57 from yr-ago







Gasoline Stocks as fo 1/21/11
230.1 Up 2.4 for the week Up 0.6 from Yr-ago
Prices
2.459 Down 0.036 for the week Up 0.493 frm Yr-ago



Distillate Stocks
165.7 Down 0.1 for the week  Up 8. from Yr-ago
Prices
2.651 Up 0.006 for the week Up 0.709 from Yr-ago

FOMC Minutes

Excerpt from press release:

For immediate release:

"Information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. Growth in household spending picked up late last year, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, while investment in nonresidential structures is still weak. Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Although commodity prices have risen, longer-term inflation expectations have remained stable, and measures of underlying inflation have been trending downward."

Market Recap.01.04.11

FOMC Minutes (cliick to go to Federal Reserve website)

"To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability. "


 Factory Orders (Click to view details)



Factory Orders Prior=-0.7% Est=-0.3 Act=+0.7

Transportation orders were stronger-than-expected and recent economic reports continue show that the economy is slowly gaining strength.


Weekly Sales Reports
Goldman w/w Prior =+1.0% Latest = +0.4%
Goldman y/y  Prior = +4.8% Latest = +3.6%
Redbook w/w Prior = +4.6% Latest = + 3.5% 
Weekly retail sales reports came in better-than-expected, as shoppers made it stores despite the weather.

Metropolitan Area Employment and Unemployment Summary
(Click to go to BLSwebsite)

METROPOLITAN AREA EMPLOYMENT AND UNEMPLOYMENT -- NOVEMBER 2010



Unemployment rates were higher in November than a year earlier in 182 of the 372
metropolitan areas, lower in 166 areas, and unchanged in 24 areas, the U.S. Bureau
of Labor Statistics reported today. Thirteen areas recorded jobless rates of at
least 15.0 percent, while 11 areas registered rates of less than 5.0 percent. One
hundred eighty metropolitan areas reported over-the-year increases in nonfarm pay-
roll employment, 176 reported decreases, and 16 had no change. The national unem-
ployment rate in November was 9.3 percent, not seasonally adjusted, compared with
9.4 percent a year earlier.




Commodity Overview
The improvment in the global economic landscape could lead to portfolio rebalancing, as investors move back to equities and reduce their "alternative investment" holdings> (Gold, oil, commodities) 
Energies -1.6% Metals -2.64% Grains, -1.25%

Economic Data for 12.14.10

NFIB Small Business Index (click to view release)
93.28 vs 91.7 prior. *3 year high


ICSC Goldman Store Sales
w/w +0.8% vs -2.1% prior
y/y +3.1% vs +2.6% year-ago

PPI
 PPI m/m +0.8% vs +0.4%p
       y/y  +3.5%
Less F & E m/m 0.3% vs -0.6% prior
               y/y +1.3%



 Retail Sales
m/m +0.8% vs +1.2% prior
less autos +1.2% s 0.4

Redbook
+2.5% vs +3.8% prior

Business Inventories


FOMC Minutes (click to view release)

FOMC Statement 11.03.10

FOR IMMEDIATE RELEASE
Statement Regarding Purchases of Treasury Securities
On November 3, 2010, the Federal Open Market Committee (FOMC) decided to expand the Federal Reserve’s holdings of securities in the System Open Market Account (SOMA) to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate. In particular, the FOMC directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to purchase an additional $600 billion of longer-term Treasury securities by the end of the second quarter of 2011.
The FOMC also directed the Desk to continue to reinvest principal payments from agency debt and agency mortgage-backed securities into longer-term Treasury securities. Based on current estimates, the Desk expects to reinvest $250 to $300 billion over the same period, though the realized amount of reinvestment will depend on the evolution of actual principal payments.
Taken together, the Desk anticipates conducting $850 to $900 billion of purchases of longer-term Treasury securities through the end of the second quarter. This would result in an average purchase pace of roughly $110 billion per month, representing about $75 billion per month associated with additional purchases and roughly $35 billion per month associated with reinvestment purchases.

FRB: Beige Book

Prepared at the Federal Reserve Bank of Philadelphia and based on information collected on or before January 4, 2010. This document summarizes comments received from businesses and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.


Reports from the twelve Federal Reserve Districts indicated that while economic activity remains at a low level, conditions have improved modestly further, and those improvements are broader geographically than in the last report. Ten Districts reported some increased activity or improvement in conditions, while the remaining two--Philadelphia and Richmond--reported mixed conditions. The last Beige Book reported eight Districts with increased activity or improving conditions and four Districts showing little change and/or mixed conditions.
Most Districts reported that consumer spending in the recent 2009 holiday season was slightly greater than in 2008, but still far below 2007 levels. Retail inventory levels remain very lean in nearly all Districts. Auto sales held steady or increased slightly since the last Beige Book in most Districts. Reports on tourism were mostly flat or weak, but for two Districts whose ski resorts enjoyed early season snowstorms. Nonfinancial services activity generally improved in Districts that reported on this sector. Of five Districts reporting transportation services, volumes were slightly up or mixed. Manufacturing activity has increased or held steady since the last report in most Districts. Among Districts reporting on near-term expectations, the manufacturing outlook was optimistic, but spending plans remain cautious.
Toward the end of 2009, home sales increased in most Districts, especially for lower-priced homes. Home prices appeared to have changed little since the last Beige Book, and residential construction remained at low levels in most Districts. Commercial real estate was still weak in nearly all Districts with rising vacancy rates and falling rents. Since the last report, loan demand continued to decline or remained weak in most Districts, while credit quality continued to deteriorate. Cold weather at the end of the year adversely affected some late crops and stressed livestock, but above-average yields for early crops were reported by some Districts. Energy-related production has risen moderately since the last Beige Book.
Although some hiring was reported in a few Federal Reserve Districts, labor market conditions remained generally weak with modest wage increases appearing in just a few Districts. Price pressures remained subdued in nearly all Districts, though increases in metals prices were reported and agricultural prices have been mixed.
http://www.federalreserve.gov/fomc/beigebook/2010/20100113/default.htm

FOMC Statement 09.23.09

Press Release

Release Date: September 23, 2009
For immediate release
Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt. The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. As previously announced, the Federal Reserve’s purchases of $300 billion of Treasury securities will be completed by the end of October 2009. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
2009 Monetary Policy Releases

Last update: September 23, 2009

Text of FOMC Meeting

Press Release

Release Date: June 24, 2009
For immediate release
Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.
The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
2009 Monetary Policy Releases