December 14th, 2011 9:40 AM by Mel Samick
Last week there was news of better coordination among all Euro zone countries at the Euro Summit. That, along with mixed domestic indicators kept the stock market rolling along. Investors took a cue from the summit, where all Euro members committed to working on reducing costs and implementing tighter fiscal controls. Equities were on a buying spree with the hope that the economy will improve because of Europe's efforts to fix its precarious financial and economic conditions, while cooler inflation in China could mean that the country can curb inflation without sacrificing economic growth.
All major indices last week were up by nearly one percent. The S&P closed at 1,255 while the Dow ended the trading week at 12,184. In domestic indicators, October sales were up while Inventory levels also rose to 1.6 percent for the same month. Consumer borrowing also rose for the month of October mainly due to Auto and Student loans. Per the University of Michigan, Consumer Sentiment is due to rise in the month of December. The Trade Imbalance for the month of October shrunk as imports slipped by $2.3 billion due to lower oil prices during that period. On the flip side, declining economic conditions with our trading partners took a toll on factory orders as they fell in October after being flat for the past three months. On the employment front, Jobless Claims came in again at the under 400 thousand mark in the first week of December.
The Ten year treasury yield ended flat at 2.05 percent. Towing the same line, mortgage rates were also flat last week. At the end of the week, the Conforming Fixed 30-year rate leveled out at around 3.75 percent, while the Conforming Fixed 15-year rate finished at around 3.25 percent. Standard 5/1 ARM rates were last seen hovering at around 2.84 percent.
This week, investors will be focusing on the Euro zone development for solving the European debt crisis. In other major economic indicators, the Fed is expected to keep interest rates unchanged as part of the FOMC meeting announcement on Tuesday. Import and Export Prices on Wednesday and the Producer Price Index on Thursday and the Consumer Price Index on Friday will be of interest.
Information provided by NYCB Capital Markets