Friday, May 1, 2009

Quick Notes for the Day - May 1

Consumer Sentiment Rises in April - Consumer sentiment rose in April, but remained at relatively low levels, according to media reports of a survey released Friday by the University of Michigan and Reuters. The consumer sentiment index rose to 65.1 from 57.3 in March. In mid-April the estimate was 61.9. Economists were looking for a final April result of 62. The recent move in the stock market and a leveling of economic news pointing toward a bottom of the recession were credited with the change in sentiment. In November, consumer sentiment hit a record low of 55.3.

Stress Test Results to be Released on Thursday - The Federal Reserve and the U.S. Treasury Department will release bank stress test results on Thursday, later than previously planned, The Wall Street Journal reported Friday on its Web site. Regulators are expected to disclose potential loss estimates for the country's 19 largest banks individually, according to The Journal.

Treasurys Down, Oil Up on Economic Outlook - Treasurys fell early on Friday (yields thus went higher) as hopes that the worst of a global recession might be behind led investors away from safe assets. In addition, the market is absorbing huge amounts of debt issued by the government to fund its recovery efforts. Next week, the Treasury Department will auction a record $71 billion in notes and bonds in its quarterly refunding. Yields on the benchmark 10-year Treasury bond were up 5 basis points to 3.166%, while those on two-year notes were up 1 basis points to 0.923%. The same hopes that fueled the bottoming of a global recession fueled a little bump up in oil by more than 0.5%.

Gold Down, Copper Up - Much like Treasurys, gold is seen as a "safe haven" during economic uncertainty. With the continued hopes that the global economy may be bottoming, gold futures dropped again Friday with loss for the week being roughly 3%. On the flip side, as gold has dropped, copper has started to move up. The primary reason here is that copper is still one of the base metals in construction. It is needed obviously for electric lines (both commercial and residential), some internet cabling, etc. A change in copper price could reflect the demand for increased construction worldwide (China primarily). Copper moved more than 1% higher Friday.

More Auto News: Chrysler Financial Pushing to GMAC; Ford Sales Drop - Chrysler Financial, the separate financing arm for Chrysler LLC, stopped offering auto loans for car buyers, The Wall Street Journal reported Friday on its Web site, citing Chrysler dealers. Chrysler Financial, which said it would shutter its business Thursday, will direct business toward GMAC LLC, General Motors's finance arm, according to The Journal. Also, Ford reported a 31.6% drop in April domestic sales to 134,401 vehicles from 196,385 a year ago. Truck sales slid 33% to 77,435 units with sales of the the F-Series pickup down 35.8% to 28,757. If you combine Ford, Lincoln and Mercury together, the combined car sales fell 28.8% to 52,463 units. Additonally, Volvo sales slumped 36.9% to 4,503 vehicles.

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