March 29th, 2012 9:01 AM by Mel Samick
With a light economic calendar in hand last week, investors preferred to play it safe and book some profits while pausing to review the slowing global economy. PMI data from Europe was short of investors' expectations, while the Chinese economy points to PMI data on a somewhat downward trajectory. Volatile oil prices, which settled at $106.86 per barrel last week, didn't help the cause either. Talks of a military attack on Iran's nuclear sites subsided in the last couple of weeks and should help to stabilize oil prices. However, gas prices hanging around $4 per gallon will continue to be a big pinch on consumers' wallets.
All of the major indices ended up losing ground last week. By week's end, the S&P closed at 1,370 while the Dow ended the trading week at 12,169. As the first quarter of 2012 comes to a close, the S&P and NASDAQ have already gained 11 percent and 17 percent respectively. The tech sector and the financial sector have played a major role and have gained nearly 20 percent for the quarter. The improving labor market continued last week as weekly jobless claims were at 348K, the lowest threshold in the last couple of years. Treasuries were on a roller-coaster ride the entire week, hitting a high of 2.41 percent and a low level of 2.21 before settling at 2.24 by the end of week.
The Housing sector received the major share of economic news last week. The housing data came in more or less in line with investors' expectations. Housing Starts were at an annualized rate of 698,000 units in February, slightly lower than revised previous month's rate, but Building Permits were higher than consensus. New Home Sales for February were down by 1.6 percent, while the inventory level remained unchanged. At the end of the week, the Conforming Fixed 30-year rate leveled out at around 3.85 percent, while the Conforming Fixed 15-year rate finished at around 3.14 percent. Standard 5/1 ARM rates were last seen hovering around 2.8 percent.
This week, investors will be busy with heavy economic data as well as closing their books for the first quarter. In other major economic indicators, consumer outlook will be gauged from Consumer Confidence and Consumer Sentiment releases on Tuesday and Friday respectively. Durable Goods Orders on Wednesday, GDP on Thursday and Chicago PMI on Friday will be yet another indication of future economic growth and outlook.
Information provided by NYCB Capital Markets