Another week brings more opportunities to gauge the economy, and investing opportunities, in the form of economic indicators.
For the second week of April, investors can look forward to the National Federation of Independent Business Index, the Beige Book, the producer price index, the Consumer Price Index and the University of Michigan Consumer Sentiment Index.
NFIB small business survey
On Tuesday, the National Federal of Independent Business will release their survey of small business owners for the month of March. The February reading of the NFIB small business survey, released last month, indicated an increase for the sixth consecutive month.» Read more
I know nothing about cars. Short of becoming educated about modern fuel-injection engines, I walk into service stations like a willfully ignorant lamb. It’s all a vast mystery, and I’m surprisingly OK with that. Thus far, it’s worked out well — my car runs. Case closed.
It’s much more difficult to gauge service on products that are more abstract than cars. Things such as 401(k)s, individual retirement accounts, taxable brokerage accounts and the universe of investment options therein can be confusing. Not only that, the people paid to service these accounts, financial advisers, may benefit from the confusion.» Read more
On Wednesday, President Obama signed the STOCK Act into law. The acronym stands for Stop Trading on Congressional Knowledge Act.
The act bars members of Congress, executive branch employees and judicial employees from profiting off nonpublic information gleaned on the job, according to a statement from the White House press secretary on Wednesday.
In his remarks at the signing, President Obama said:
The STOCK Act makes it clear that if members of Congress use nonpublic information to gain an unfair advantage in the market, then they are breaking the law. It creates new disclosure requirements and new measures of accountability and transparency for thousands of federal employees. That is a good and necessary thing.» Read more
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.