USA bourses close down marginally despite the mainly positive high impact news events
The main bourses in the USA closed down marginally on Thursday despite there being some positive data published regarding the USA economy. The USA weekly unemployment claims fell to 311K a fall of 10K on the previous week whilst the 4 week morning average fell to 317K a fall of circa 9.5K.
Also the USA economy has expanded at a rate of 2.6% over the latest quarter, up from the 2.4% previously. The negative news from the USA came in the form of existing home sales which fell for the eight month in series according to the data released.
Pending Sales of Existing Homes in U.S. Decline for Eighth Month
Contracts to purchase previously owned U.S. homes unexpectedly fell in February for an eighth straight month, a sign of further weakness in the industry. The index of pending home sales decreased 0.8 percent after a 0.2 percent drop the prior month that was previously reported as a gain, figures from the National Association of Realtors showed today in Washington. The median forecast of 39 economists surveyed by Bloomberg called for a 0.2 percent rise. Colder-than-normal weather probably played a role in discouraging prospective buyers faced with rising mortgage rates, higher prices and limited supply of cheaper properties.
US Unemployment Insurance Weekly Claims Report
In the week ending March 22, the advance figure for seasonally adjusted initial claims was 311,000, a decrease of 10,000 from the previous week’s revised figure of 321,000. The 4-week moving average was 317,750, a decrease of 9,500 from the previous week’s revised average of 327,250. The advance seasonally adjusted insured unemployment rate was 2.2 percent for the week ending March 15, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 15 was 2,823,000, a decrease of 53,000 from the preceding week’s revised level of 2,876,000.
Economy in U.S.A. Expanded at Faster Pace Than Previously Estimated
The U.S. economy grew more rapidly in the fourth quarter than previously estimated as consumer spending climbed by the most in three years, showing the expansion had momentum heading into this year’s harsh winter. Gross domestic product grew at a 2.6 percent annualized rate from October through December, more than the 2.4 percent gain reported last month, figures from the Commerce Department showed today in Washington. The median forecast of 79 economists surveyed by Bloomberg called for a 2.7 percent increase. Robust consumer spending on services, particularly health care, helped accelerate the expansion.
Market overview
The DJIA closed down 0.03%, SPX down 0.19% and the NASDAQ down 0.54%. Euro STOXX closed up 0.11%, CAC down 0.14%, DAX up 0.03%, UK FTSE down 0.26%. The DJIA equity index future is up 0.02%, SPX down 0.11% and the NASDAQ future down 0.52%. Euro STOXX is up 0.20%, DAX up 0.06%, CAC down 0.08% and the UK FTSE future down 0.20%.
NYMEX WTI oil finished the day up 1.07% at $101.33 per barrel, with NYMEX nat gas up 4.13% at $4.58 per therm. COMEX gold finished the day down 0.87% at $1292.00 per ounce with silver down 1.40% at $19.70 per ounce.
Forex focus
The euro dropped 0.5 percent to 82.72 pence early evening New York time, the third-straight daily decline. It touched 82.63 pence, the lowest since March 6th. Europe’s common currency fell 0.3 percent to $1.3740, also a third consecutive loss, the longest stretch since January. The yen gained 0.2 percent to 140.41 per euro and slipped 0.1 percent to 102.18 per dollar. The euro fell to a three-week low against the pound on speculation the European Central Bank will ease monetary policy while above-target U.K. retail sales data added to bets the Bank of England will increase interest rates.
The kiwi strengthened 0.9 percent to 86.72 U.S. cents and reached 86.86 cents, the highest level since Aug. 2nd, 2011. New Zealand’s dollar, called the kiwi, jumped after the nation reported a trade surplus of NZ$818 million ($709 million), the most since April 2011.
New Zealand’s currency has advanced 5.8 percent in the past three months, the best performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The U.S. dollar and the euro dropped 1.3 percent, while the yen gained 2 percent.
Bonds briefing
Treasury five-year note yields rose two basis points, or 0.02 percentage point, to 1.72 percent as of 5 p.m. in New York. The price of the 1.625 percent note due in March 2019 fell 3/32, or 94 cents per $1,000 face value, to 99 1/2. Thirty-year bond yields fell two basis points to 3.53 percent and touched 3.49 percent, the lowest since July 3rd. The benchmark 10-year note yield declined one basis point to 2.68 percent and touched 2.66 percent, the lowest since March 17th. The average over the past decade is 3.46 percent. Seven-year note yields added one basis point to 2.25 percent.
The gap in yields between U.S. five- and 30-year Treasuries narrowed to the least in four years as traders speculated economic growth may be robust enough for the Federal Reserve to raise interest rates next year. The securities sold Thursday priced at a yield of 2.258 percent, compared with the pre-auction forecast of 2.261 percent from the Fed’s 22 primary dealers required to bid at U.S. government-bond offerings. The bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.59, compared with the average for the past 10 auctions at 2.56.
Fundamental policy decisions and high impact news events for March 28th
Friday German CPI is anticipated to come in at 0.4% with import prices at 0.3%. The UK current account is expected to print at -$13.5 bn. Final GDP is expected to come in at 0.7% for the quarter. Index of services for the quarter in the UK is predicted to come in at 0.6%.
Personal spending details are published in the USA, expected in at 0.3% month on month up with personal income up 0.4% month on month. The revised university of Michigan consumer sentiment index is published expected to come in at 80.6.
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