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Bob Carey
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  US Economy and Credit Markets Week Ended June 1, 2012
Posted Under: Weekly Market Commentary

 
Five, ten and thirty year treasury yields all plunged to record lows this week as investors sought safe haven assets amongst weakening in the European debt situation and disappointing US jobs reports. Markets were closed Monday for Memorial day and prices were relatively unchanged Tuesday as S&P Case-Shiller housing data was better than expected, but the Dallas Fed Manufacturing index dropped to a -5.1 level versus the anticipated 3.0. Wednesday saw significantly lower yields as concerns in Greece spread to Spain and Italy, who failed to sell as much debt as had been targeted. Treasuries continued their rally on Thursday as US economic data added to foreign worries. Annualized GDP was revised down as expected from 2.1% to 1.9% for the first quarter and initial jobless claims were revised upward along with growing to 13k above the projected 370k. The Chicago PMI Index also sank to 52.7 which was 4.1 lower than anticipated. Friday's movements sent yields to record lows on a sleight of negative domestic data. The unemployment rate ticked 0.1% higher than expected to 8.2% and change in nonfarm and private payrolls were both less than half of what was projected and the previous report's numbers were revised down substantially as well. ISM manufacturing and total and domestic vehicle sales were also slightly lower than consensus expectations. Major economic reports (and related consensus forecasts) for next week include: Monday: April Factory Orders (+0.2); Wednesday: the Fed's Beige Book released; Thursday: Initial Jobless Claims (380,000); Friday: April Trade Balance (-$49.5B) and April Wholesale Inventories (0.50%).
Posted on Monday, June 4, 2012 @ 8:49 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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