US Economy and Credit Markets Week Ended April 11, 2014

Bob Carey
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US Economy and Credit Markets Week Ended April 11, 2014

Posted Under: Weekly Market Commentary

Equities struggled last week and the resulting appetite for lower risk contributed to bond prices rising as yields fell. Earnings also got off to a bad start for the first quarter which calls into question whether continued growth can be sustained and has resulted in greater demand for low risk treasuries, which are not seeing yields rise as fast as was expected. The underlying bond environment is little changed with the overnight bank lending rate still at 0-.25%, the Federal Reserve continuing to slowly unwind its bond-purchase program and inflation is stable. In spite of the market downdraft, economic reports on the week were generally positive. Reports got off to a slow start as The MBA Mortgage Application Index showed a drop due to continued slow re-financing activity. Tuesday's Jobless claims came in better than expected as 300,000 Americans filed for jobless claims for the week ended April 5th. The Labor Department's Producer-Price Index (PPI) came out Friday and registered an increase of .5% for the prior month. Gasoline and Food cost continue to climb but nonetheless, Friday's University of Michigan April Confidence Survey revealed consumer sentiment reaching its highest level since last summer. It bounced to 82.6 ahead of an estimated 81. Expectations are for consumer confidence to continue rebounding into the spring thanks for more temperate weather. The debated 'thaw' is expected to bring positive economic reports through the spring as consumer activity rebounds from the harsh winter. Major economic reports (and related consensus forecasts) for the upcoming week include: Monday: March Advance Retail Sales (0.8%, +.5%); Tuesday: March Empire Manufacturing (8.00, +2.39) and March CPI (.1%, unch.); Wednesday: MBA Mortgage Applications, March Housing Starts (975,000, +68,000) and Industrial Production (.5%, -.1%); Thursday: Prior Week Initial Jobless Claims (311,000, +5,000).

Posted on Monday, April 14, 2014 @ 8:44 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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