Succinct summation of the week’s events:
Positives:
1. Bernanke: Benefits of Fed Asset Purchases are clear and outweigh the potential costs.
2. Dow Jones Industrial Average made new 52 week highs for 6th week in a row.
3. U.S ISM Manufacturing index climbed to 54.2 from 53.1 in January.
4. Initial jobless claims better than expected (344k vs 360k)
5. Ford posts best February sales since 2006
6. Chicago PMI jumps to 56.8 11 month high
7. Orders for durable goods rose 1.9% (Ex-transport), increasing for 5th consecutive month.
8. New Home sales surge 15.6%
9. Home Depot’s profit jumped 32%, proxy for housing recovery.
10. Case Shiller Home Prices climbed 6.8% v one year ago and 0.88% from a month ago. Largest year over year gain since 2006.
11. Pending home sales up 4.5% to the highest levels since April 2010
12. Thomson Reuters/University of Michigan index of consumer sentiment climbed to 77.6 from 73.8 in January. Consumer Confidence jumps to 69.6 from 58.4
Negatives:
1. The VIX spiked 37% on Monday, it’s 11th largest one day spike
2. January personal income decreased 3.6%, the biggest one-month drop in 20 years.
3. AAII Investor bullish sentiment dropped 13.4 points to 28.4%, bears gained 4.1 points to 36.6%, highest readings for the bears since November. (Contrarians note this as a positive)
4. Dr. Copper declined to a 2 month low
5. European markets got hammered Monday with Spain off 5.5% and Italy off 5.7% on election outcomes.
6. China’s manufacturing is growing at the slowest pace in four months according to the HSBC flash PMI
7. The sequestration has arrived, an estimated 750,000 jobs will be lost.
8. Three of the four largest economies in Europe disappoint with weak PMI data. France 43.9, Italy 45.8, Spain 46.8. (below 50 = contraction).
9. US Q4 GDP increased 0.1% missing expectations of 0.5%
10. Kansas city fed manufacturing index whiffs at -10 vs estimates of -1.
11. Intraday spreads are widening. 6 out of the last 8 days have seen triple digit ranges in the Dow.
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