Mel's Blog

January 5, 2012 Market News

January 5th, 2012 9:38 AM by Mel Samick

"An optimist stays up until midnight to see the New Year in, a pessimist stays up to make sure the old year leaves", they say. Regardless, New Year's Eve is truly a moment that unites people across attitudes and latitudes. All over the world people party... at home and on the streets, at restaurants, bars and clubs. Fireworks go off at midnight everywhere, from private backyards to main squares in the largest cities. The Sydney Harbor Bridge, The Eiffel Tower, Skyscrapers in Taiwan and Singapore turn into gorgeous displays of light at the precise moment New Year arrives. The Ball is "dropped" at Times Square; people around the world make wishes and New Year resolutions. Everyone is full of hope that the future will be better than the past - magical and wonderful it is - the New Year's celebration. Happy New Year! May this new 2012 be happy, healthy and prosperous.

There was not much room for economic events in this past week, sandwiched between two long holiday weekends. On Tuesday, Consumer Confidence did shoot to the highest level in eight months at a reading of 64.5; that was a 9.3 point increase over the previous month. The S&P Case-Schiller HPI at -0.6 percent indicated contraction of month-to-month house prices, slightly more than an expected -0.4 percent. Falling prices and rates favored purchase activity. The Pending Home Sales index rose from 93.3 to 101.1, marking a 7.3 percent gain in November after a 10.4 percent increase in October. The Chicago PMI, indicator of business activity for December, stayed as strong as in the previous month, beating the forecast. The 62.5 value of the index is well above the benchmark level of 50, indicating strong month-to month growth.

During this past volatile year, the equity markets swung up and down, hitting bottom for the year in the low 10,000's range and almost approaching 13,000 at some point of time in 2011. The benchmark 10-Year Treasury note yields slipped to around the 2 percent range in the second half of the year, down from higher levels of above 3 percent in the first half. Mortgage rates hit all-time low levels in the last weeks of 2011 when the 30-Year mortgage was spotted at 3.91 percent. Gold climbed to its all-time high values, nearing $2000 in early September on the U.S. and European debt unease, but slipped way off those levels, back to around the $1600 range by the beginning of the New Year. Oil mostly kept dancing around $90-$100 per barrel, except for two brief episodes of optimism in April and pessimism in September, where it topped and bottomed correspondingly at about $10 off the annual range.

The developed world's debt and a very slow recovery kept the market focus all year long; however, the beginning of the new year of 2012 was marked by a hint of growth momentum in India and China, along with better-than-expected growth news from Europe and U.S. Investors are once again showing optimism on this first trading day of the year; the U.S. stock market jumped following solid gains in equities around Asia, Europe and Australia. The Dow was up about 2% in the first half hour of trading.

During this short week, Motor Vehicle Sales and Factory Orders are being reported today (Tuesday), along with the FOMC Minutes from the December 14 meeting. On Wednesday, ADP Employment Report, ISM Non-Manufacturing Index and MBA Purchase Applications will be released. Traditionally reported on Thursday, Jobless Claims will be followed by the highly anticipated Employment Situation on Friday. The Federal Reserve Chairman, Ben Bernanke, will speak later on Friday morning.




Information provided by NYCB Capital Markets

Posted in:General
Posted by Mel Samick on January 5th, 2012 9:38 AM



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