June 22nd, 2011 9:43 AM by Mel Samick
Last week was yet another roller-coaster ride for the financial world. Investors were looking everywhere for present and future risk By week’s end all major indices ended flat; the S&P closed at 1,271 while the Dow ended the trading week at 11,951. Retailers were among the top percentage gainers while the energy and tech sectors were the main "draggers" last week. Mixed economic reports providing a bleak economic outlook combined with a Greek bailout and the poor performance of Asian indices were the main cause of the volatility. Investors were relieved that Germany and France finally agreed on a Greek bailout package by the end of the week. But still, the Greek bailout will be on investors’ radars until it receives formal approval from the EU.In major economic indicators, the Producer Price Index and the Consumer Price Index showed some slowing, mainly caused by inflation pressures. For the month of May, PPI was up by 0.2 percent compared to 0.8 percent in April and core PPI was up by .2 percent. CPI for May was also up 0.2 percent compared to 0.4 percent in April and core CPI increased from the previous month and came in at .3 percent. Also, May Retail Sales were down mainly due to slowness in auto sales. Investors were surprised with the increase in manufacturing activity. Overall, Industrial Production saw a jump after being flat in April. Signs of pessimism on the economic outlook can be seen in Consumer Sentiment, which fell 2-1/2 points to 71.8 for the first two weeks of June, while Leading Indicators for the month of May were up, clearly showing the swing in consumer mood.The housing market got some new life with a 3.5 percent jump in Housing Construction and an 8.7 percent jump in Housing Permits. Also, commodity prices were under downward pressure last week, with crude prices falling by 6.2 percent. The 10-year treasury yield was down 3 basis points and ended the week at 2.94 percent. Towing the same line, mortgage rates were also down a little last week. At the end of the week, the Conforming Fixed 30-year rate leveled out at around 4.38 percent, while the Conforming Fixed 15-year rate finished at around 3.67 percent. Standard 5/1 ARM rates were hovering around 2.91 percent.
Information provided by NYCB Capital Markets