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Bob Carey
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  US Economy and Credit Markets Week Ended May 2, 2014
Posted Under: Weekly Market Commentary
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Yields fell this week as the geo-political situation in Ukraine continues to benefit safe assets. President Obama and Chancellor Merkel of Germany met on Friday to weigh additional economic sanctions on Russia, which cloud global growth prospects. In this uncertain environment, gold rose along with bond prices. Positive economic reports were released this week but failed to overcome the concerns surrounding Russia and Ukraine. April's Consumer Confidence Index numbers were released on Tuesday and failed to meet expectations remaining unchanged at 82.3. Citing improving growth and consumer spending, on Wednesday, the Federal Reserve confirmed it will continue bond purchases (Quantitative Easing), but at a new combined rate of $45 billion in Treasury and MBS purchases. This is down from the previous rate of $55 billion in combined purchases per month. Friday's jobs report surprised to the positive by posting 288,000 jobs created in April. The report supports the narrative of unusually harsh winter conditions causing first quarter weakness. Unemployment fell to 6.3 percent which is its lowest level since 2008, before the recession. This good news was tempered by reported workforce participation falling to 62.8 percent and a reported 800,000 individuals dropping out of the labor force in April. While the jobs report seems to support the notion of improving economic conditions, with so many workers not participating in the workforce, the report left the market with mixed feelings. Major economic reports (and related consensus forecasts) for the upcoming week include: Tuesday: March Trade Balance ($-40.2B); Wednesday: Prior week MBA Mortgage Applications (unch.); Thursday: Prior week Initial Jobless Claims (325K, -19K).
Posted on Monday, May 5, 2014 @ 7:59 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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