Serpentine! Serpentine!

As we await the Bernanke Q&A at 2:15 to hang on his every word, remember that the FOMC will release its statement at 12:30 and thus I find it highly unlikely that he will deviate at all from the message of that statement. If he did of course, it would render the statement of little use which I don’t think is his intention. Thus, what I expect from Bernanke is a little bit of serpentine as best seen in the movie The In Laws. Here is a link to a quick clip, Flexibility is what Bernanke wants and he will likely be as vague as possible today to avoid being put in any corner. With hopes that he will comment on the US$, here is a stat from Bernanke’s tenure which began on Feb 1, 2006. Since then, average hourly earnings are up 17%, great news but the US$ index has fallen 17%, thus the middle class is running in place. Elsewhere of note, the Shanghai index traded down for a 4th day and closed at a one month low but Europe was lifted by good earnings reports. The MBA said purchases fell a sharp 13.6% to a two month low. II: Bulls 54.3 v 54.2 Bears 18.5 v 19.2

Mar Durable Goods orders rose 2.5%, slightly above expectations of up 2.3% but orders ex transports and non defense capital goods ex aircraft were both a touch below forecasts. The offset though was an upward revision in all three categories for Feb from a drop in orders to a rise. Shipments, which get directly plugged into GDP, rose 1.8% and is up for a 5th straight month. Because inventories rose slightly below the level of shipments, the ratio between the two fell to 1.61 from 1.62. Bottom line, the data reflects a continued improvement in the pace of capital spending but keep a watch out for April because over the past two weeks, the Philly, Dallas and Richmond manufacturing surveys were below expectations, likely due to the aftermath of Japan and continued price pressures all are feeling. The April Chicago PMI is out on Friday and the ISM will reconcile everything on Monday.

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