Going into Easter and Passover, the economic calendar this week is fairly light, but at least one very significant report will be coming out: nonfarm payrolls and the headline unemployment rate will be released on Friday. This morning, the Institute for Supply Management’s manufacturing report showed the sector expanding in March, up 1 percent from» Read more
The stock market has put in a strong performance over the first three months of 2012, but many people are still sitting on the sidelines.
From the Marketwatch.com story, “U.S. stock market’s rise leaves many behind”:
Data suggest it has been primarily the retail investor that has remained on the sidelines as the (Standard & Poor’s 500 index) marked the start of the bull market’s fourth year by targeting, and then overtaking, 1,400 — a level not hit since 2008.
According to the story, trading volumes are well beneath those of the first quarter last year, and more money has left domestic equity mutual funds in the past 10 months than has gone in.» Read more
Today, the Consumer Confidence Index for the month of March was released by The Conference Board.
Guess what? Consumers feel pretty OK. The index is down slightly from last month, to 70.2, but that was expected after the big gain in February.
“The moderate decline was due solely to a less favorable short-term outlook, while consumers’ assessment of current conditions, on the other hand, continued to improve. The Present Situation Index now stands at its highest level in three and a half years (61.1, Sept. 2008), suggesting that despite this month’s dip in confidence, consumers feel the economy is not losing momentum,” Lynn Franco, director of The Conference Board Research Center, said in a press release.» Read more
Another week brings more economic indicators for investors to watch. This time around, we’ll see pending home sales, consumer confidence, durable goods orders, the weekly initial jobless claims, as well as personal income and outlays.
Pending home sales
This report came out Monday morning from the National Association of Realtors. It tracks signed contracts on homes, condos and co-ops and is considered a leading indicator of housing activity.
The pending home sales index came in under expectations, falling 0.5 percent for the month of February.
On Tuesday, the Conference Board releases the Consumer Confidence Index for the month of March. Consumer confidence skyrocketed in February, up to 70.8 from 61.5, the revised reading for January.» Read more
Yesterday, the Financial Times website, FT.com, reported that $13 billion of 10-year Treasury inflation-protected securities were sold at a negative yield of -0.089 percent at this week’s Treasury auction.
The interest rate on these particular TIPS was 0.125 percent; investors paid a premium of $102.23 for every $100 worth of bonds. Paying the extra $2.23 pushed the yield down to -0.089 percent.
Why would otherwise rational people pay for bonds that are, on the surface, guaranteed to lose money? In a word: inflation. TIPS pay more as inflation rises, thanks to the Consumer Price Index-linked component that adjusts the principal twice per year.» Read more
On Wednesday, the Hartford announced it would be exiting the annuity and life insurance business. According to the press release, the company will stop new annuity sales April 27.
In order to divest the company of the annuity arm, the company is placing the annuity business into runoff. That means the company will allow the existing annuities to be drawn down until they are depleted.
“As part of the runoff strategy, The Hartford will continue to pursue actions to reduce the risks associated with the legacy annuity blocks, and to improve capital efficiency,” the press release stated.
According to the Insured Retirement Institute, or IRI, the Hartford represented 0.6 percent of all variable annuity sales in 2011.» Read more
The economic calendar for investors is relatively light this week. Highlights include housing starts for February, existing home sales, weekly jobless claims, the leading indicators index and new home sales.
On Tuesday, the new residential construction report, also known as housing starts, will be released by the U.S. Census Bureau. The report tracks the number of building permits issued for the month, housing starts and housing completions.
Here we are in the middle of the third month of an election year, and the stock market is going gangbusters: The Standard & Poor’s 500 index, for example, closed 2011 at 1257.60 and hit 1401.07 today, an 11.4 percent increase.
Is it a coincidence or the presidential election cycle at work? That’s a theory that posits that the stock market does better in the second half of a president’s term. In an interview two months ago, editor of the “Trader’s Almanac,” Jeffrey Hirsch, told me:
You hear that there have been no losses in the third year of a president’s term since 1939, and it’s because …» Read more
This week’s economic calendar will be dominated by the Federal Open Market Committee meeting on Tuesday. Not much in the way of new information is expected from this week’s meeting.
But Friday’s nonfarm payrolls report from the Department of Labor showed more jobs than expected being added to employer payrolls for the month of February. Combined with decreases to the headline unemployment rate for five straight months through January, the Fed may find reasons to be a bit more enthusiastic about economic growth at Tuesday’s meeting.
Before the Fed announcement, on Tuesday morning, the retail sales report will be released.» Read more
With Wednesday’s launch of the newest iteration of their groundbreaking tablet, the iPad, Apple is once again the toast of the town. The new iPad will be in stores March 16, and forecasts for the stock are stretching into the stratosphere. For now, it’s tough to scratch up arguments against investing in Apple.
Most mutual fund investors probably already own the iconic technology company in large-cap mutual funds.
A story published in the Wall Street Journal on March 5, “Apple is hard to resist” tells us that nearly 86 percent of the large-growth funds tracked by Morningstar own Apple. Many own quite a bit.» Read more