Treasuries advanced after government reports showed the economy grew at a slower pace in the second quarter than forecast, fueling speculation the Federal Reserve won't raise interest rates this year.
The gains pushed two-year notes to their biggest monthly rally since February after the growth report, which contained revisions that showed the economy may have slipped into recession during the last three months of 2007. Initial claims for unemployment benefits reached the highest level in more than five years. Initial jobless claims increased by 44,000 to 448,000 in the week ended July 26, from a revised 404,000 the prior week, the Labor Department said. Economists had forecast a drop in claims. The total number of people on benefit rolls rose to the most since December 2003.
The bond market still isn't providing investors with enough income to cover the rate of inflation, which rose 5 percent in the year ended June 30, Labor Department data show. The Standard & Poor's 500 Index has dropped 13 percent this year and the dollar declined 4.7 percent against the currencies of six trading partners as U.S. financial institutions posted losses and writedowns totaling $250 billion in the deepest housing recession since the Great Depression.
According to the Kiplinger Letter released yesterday, "California will fare well in the increasingly competitive global economy. Current job and housing troubles are only a pause in a wave of growth that will carry the state in a rising tide of expansion over the next 10 years."
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Thursday, July 31, 2008
Wednesday, July 30, 2008
No big news lots of Volatility
President Bush signed The Housing and Economic Recovery Act of 2008 this morning, despite a plea from the CEO of Nehemiah, Scott Syphax, asking the President to save the seller funded DAP program. Seller funded DAPs will be eliminated under the new law.
Without any significant or substantially reliable economic news this week, financial markets have been wildly volatile. The Dow lost 240 points on Monday, then rose 260 points yesterday. This morning the ADP Employment Report was released and showed an increase of 9,000 private sector jobs from June to July, which was a big surprise when compared to expectations that ADP would report a loss of 60,000 jobs. Stock futures pointed to a lower open prior to the ADP report, but reversed course in a huge way upon the report's release and The Dow opened up by more than 150 points this morning.
Two reports are scheduled for tomorrow. The quarterly Gross Domestic Product, which is a key indicator and measure of the countries growth, and the Q2 Employment Cost Index, which measures the cost of wages and benefits (wage inflation).
Without any significant or substantially reliable economic news this week, financial markets have been wildly volatile. The Dow lost 240 points on Monday, then rose 260 points yesterday. This morning the ADP Employment Report was released and showed an increase of 9,000 private sector jobs from June to July, which was a big surprise when compared to expectations that ADP would report a loss of 60,000 jobs. Stock futures pointed to a lower open prior to the ADP report, but reversed course in a huge way upon the report's release and The Dow opened up by more than 150 points this morning.
Two reports are scheduled for tomorrow. The quarterly Gross Domestic Product, which is a key indicator and measure of the countries growth, and the Q2 Employment Cost Index, which measures the cost of wages and benefits (wage inflation).
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