Tuesday, May 26, 2009

Quck Notes & Articles of the Day - May 26

Consumer Confidence Index Jumps Dramatically Higher - The consumer confidence index rose to 54.9 for May vs. a revised 40.8 for April as expectations for jobs improved. The gain is the fourth-largest in the 32-year history of the survey, and the index is at its highest level in eight months. Analysts had predicted a rise to around 43 but certainly not almost 55. "Expectations are that business conditions, the labor market and incomes will improve in the coming months," said Lynn Franco, director of the Conference Board's Consumer Research Center. "While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us." The market jumped significantly higher on the news with the Dow rising 120 points.

Crude Oil Drops - Crude oil fell back below $60 a barrel Tuesday morning on expectations that OPEC will not cut production quotas at a Thursday meeting and as the U.S. dollar rose against the euro (oil is sold in US dollars thus as it strengthens the commodity will generally fall in price). Instead of cutting production quotas, OPEC will most likely try to ask member countries to adhere to the previous quotas (only 80% participation) since some are over producing currently. The dollar was strengthened by a flight-to-quality following North Korea's nuclear test Monday.

European Investors Grab Corporate Debt - WSJ - While struggling banks are unwilling to lend, European investors are piling into corporate debt and risky bonds at a surprising rate, The Wall Street Journal reported on Tuesday. So far this year, European investors have invested $268 billion in corporate bonds, the highest level since at least 1995, The Journal said. The appetite for bonds is stretching all the way to some of the riskiest types of bonds, driving hopes that the money could restart even the stagnant market for initial public offerings of stocks, key to any economic recovery. "We're all surprised by how quickly the market recovered," said Emmanuel Gueroult, head of European equity capital markets at Morgan Stanley in London, according to the Journal.

Stocks Modestly Higher, Gold Lower - U.S. stocks turned higher shortly after the open Tuesday, with strength in technology shares (led by an Apple upgrade) offsetting early concerns about North Korea's nuclear tests and the fate of GM (GM was off around 20% at the open). Gold moved lower on a strengthening dollar and the news out of North Korea as well.


We Are Raising Your Rate - By Peter Jeffrey - The Wall Street Journal - A humorous little take on credit card companies - "Here Come the Candid Credit Card Companies" - "We are telling you about how it is going from a worrisome 12% to a smokin’ 28%, compounded half-hourly, with your house, your car and the pewter tea service that has been in your family since the Norman Conquest, which your mother would polish with her own mother as a little girl, dreamily gazing at her reflection, as collateral."

No comments: