S&P PUTS THE U.S. CREDIT RATING OUTLOOK TO NEGATIVE?
Standard & Poor’s rattled Wall Street early last week when it revised its outlook on U.S. long-term debt from “stable” to “negative”. I'm not sure if S&P was trying to make a statement of "we're on top of things" after they surely weren't in regards to the exotic mortgage instruments of years past. Regardless of the reason, their action was utterly foolish and absurd. Across the next three trading days, earnings sent the market higher. The four-day week turned into a winning one, as the numbers show: DJIA, +1.33% to 12,505.99; S&P 500, +1.34% to 1,337.38; NASDAQ, +2.01% to 2,820.16.5,6HOME SALES, HOME STARTS IMPROVE IN MARCH
The National Association of Realtors announced that existing home sales were up 3.7% last month, about 1% higher than the rebound expected on Wall Street. (NAR noted that about 35% of these were cash sales.) In another positive development for the real estate market, the Commerce Department measured a 7.2% gain in housing starts and an 11.2% rise in construction permits for March.1
GOLD AT NEW HIGH, DOLLAR TOUCHES 3-YEAR LOW
Gold cracked the $1,500 ceiling last week. Prices reached $1,508.75 on Thursday before settling at $1,503.80 on the COMEX. Silver hit yet another 31-year high at $46.68 per ounce, with prices ending the week at $46.06. Meanwhile, the U.S. Dollar Index descended to 73.735 during the market day on Thursday, a low unseen since August 2008.2,3
LEI INDEX UP FOR NINTH STRAIGHT MONTH
The Conference Board’s index of leading economic indicators rose another 0.4% for March, complementing a revised 1.0% gain in February. Economists polled by Bloomberg News had forecast a 0.3% advance.4
THIS WEEK: The height of earnings season is upon us. On tap for Monday, we have 1Q results from Netflix and March new home sales data. Tuesday offers earnings reports from Coca-Cola, UPS, 3M, Delta Air Lines, Valero, Ford, Western Union, U.S. Steel, Broadcom and Amazon, along with the February Case-Shiller home price index and the Conference Board’s April consumer confidence index. Wednesday brings 1Q results from eBay, ConocoPhillips, Credit Suisse, General Dynamics, Starbucks, BP, Boeing and Allstate, plus a Fed rate decision and a report on March durable goods orders. Thursday gives us earnings from PepsiCo, P&G, Motorola, Exxon Mobil, Microsoft, Sprint Nextel, Bristol Myers, Viacom and Occidental Petroleum, plus February pending home sales and weekly jobless claims data. What does Friday bring? The March consumer spending report and the University of Michigan’s final March consumer sentiment poll, plus 1Q results from Merck, Caterpillar, Chevron, Weyerhaeuser and DR Horton.
“Don't let what you cannot do interfere with what you can do.”
– John Wooden
WEEKLY TIP
If you’re getting married, inform your partner about all of your debt before the wedding day. Discussing it the day of the wedding or on the honeymoon can kill the mood. Learning about credit and debt issues after the knot is tied can lead to much frustration.
Best Regards,
Kevin Kroskey, CFP, MBA
Citations.
1 - blogs.wsj.com/marketbeat/2011/04/20/existing-home-sales-rise-market-cheers/ [4/20/11]
2 - reuters.com/article/2011/04/21/us-markets-global-idUSTRE71H0EB20110421 [4/21/11]
3 - cnbc.com [4/22/11]
4 - bloomberg.com/news/print/2011-04-21/index-of-leading-economic-indicators-in-the-u-s-rises-0-4-.html [4/21/11]
5 - marketwatch.com/story/sp-cuts-us-rating-outlook-to-negative-2011-04-18 [4/18/11]
6 - cnbc.com/id/42708009 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F22%2F10&x=0&y=0 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F22%2F10&x=10&y=18 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F22%2F10&x=0&y=0 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F21%2F06&x=0&y=0 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F21%2F06&x=0&y=0 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F21%2F06&x=0&y=0 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F23%2F01&x=0&y=0 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F23%2F01&x=0&y=0 [4/22/11]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F23%2F01&x=0&y=0 [4/22/11]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/22/11]
9 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/22/11]
10 - treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
11 -montoyaregistry.com/Financial-Market.aspx?financial-market=who-needs-wealth-management-services&category=4 [4/24/11]
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