Money Talk Podcast, Friday April 27, 2012
Advisors on This Week’s Show
(with Max Hoelzl and Joel Dresang)
Week in Review (April 23-27, 2012)
Significant economic indicators & reports
No significant releases
With perhaps nowhere left to go but up, home prices narrowed their year-to-year losses in February but remained below year-earlier figures for the 17th month in a row, according to the 20-city S&P/Case-Shiller Home Price Index. Of the 20 cities, 15 had slighter 12-month losses than in January. The overall index narrowed for the second month in a row.
Another measure of the beleaguered housing industry, new-home sales, dipped 7% in March, which was stronger than analysts had expected. Revised data from the Commerce Department and the Department of Housing and Urban Development showed February sales to be the highest since the homebuyer tax credit stimulus in 2010. Even so, the annual sales rate is about half the average rate since 1963.
Consumer confidence edged down slightly in April for the second month in a row. While opinions continued to warm to current conditions, the outlook took a setback, the Conference Board reported. Only 14% of those surveyed expected income gains in the next six months, down from 15.5% in March.
Year-to-year gains in orders for durable goods stayed above average in March, but the monthly figures declined for the second time in three months. Orders slowed broadly across industries, led by the volatile commercial aircraft category, according to the Commerce Department. Orders for nondefense capital goods excluding aircraft (an indicator of business investment) fell slightly from February, when orders had been more robust than previously reported.
As a reminder that labor market conditions are still sorting out, the moving four-week average for initial unemployment claims rose for the third week in a row. Labor Department data showed jobless claims 42% lower than the height of the recession and below the critical level of 400,000 claims for the 26th week in a row.
The National Association of Realtors said its pending home sales index gained 4.1% in March, up from a stronger February than previously reported. The housing market has clearly turned the corner,” an economist for the trade association said. Inventory has fallen with rising sales, which should help stabilize prices.
The economy grew at an annual rate of 2.2%, slower than expected in the first quarter, according to the first of three estimates from the Bureau of Economic Analysis. By comparison, the Gross Domestic Product advanced 3% in the fourth quarter, which was the only higher rate in 2011. Better-than-expected consumer spending led the first-quarter growth with assistance from auto manufacturing and homebuilding. Government spending continued to decline. A key measure of inflation remained within the comfort zone set by the Federal Reserve, which is watching for the point at which low interest rates spark higher prices.
April consumer sentiment advanced slightly from March as Americans continued be feel lackluster toward current conditions but grudgingly more optimistic about future prospects. The report from the University of Michigan and Thomson Reuters news service suggested that much of consumers’ outlook is based on the anticipation of more jobs and lower gas prices.
Where the Markets Closed for the Week
- Nasdaq – 3,069 up 68 points or 2.3%
- Standard & Poor’s 500 – 1,404, up 25 points or 1.8%
- 10-year U.S. Treasury Note – 1.94%, down 0.03 point
- Dow Jones Industrial Average – 13,234, up 204 points or 1.6%