World leaders convened in London for the G20 summit and pledged to do whatever is necessary to fix the global economy. In the meantime, most media sources are trying to convince the public that the worst is behind us. On Friday the employment report came out and showed that an additional 663k jobs were lost in March, bringing the total losses to over 5 million and the unemployment rate to 8.5%, the worse in 25 years.
Equities
Stock indexes rallied significantly in March. The Dow, Nasdaq, and S&P500 were up 3.1%, 5.0%, and 3.3% for the week and 14%, 18%, and 15% for the month, respectively. The Nasdaq has even pulled into positive territory for 2009, up about 2%. The top corporate news for the week was an earnings blowout by BlackBerry maker Research in Motion and a looming bankruptcy for General Motors. RIMM stock surged 32% and GM lost 42%. As a BlackBerry owner with iPhone envy, your narrator is considering a short position in RIMM.
Bonds
Two weeks ago the Fed announced that it would begin purchasing long-dated Treasury securities, immediately sending yields down and prices up. The rally in the equities markets however has begun to entice some investors back into riskier investments. After briefly dipping below 3.5% the yield on the 30-year Treasury rebounded and closed the week at 3.72%. The yield on the 10-year also ended the week higher at 2.91%. The TED spread continues to fall, generally a good indicator for thawing credit markets. The spread currently stands at 96bps.
What to look for next week:
It is a slow week for economic data, but keep an eye out for the international trade balance on Thursday. Consensus is for net trade balance of $36 billion net deficit, a six year low. The slowing economy and strengthening dollar have resulted in US consumers buying up fewer imports.
Equities
Stock indexes rallied significantly in March. The Dow, Nasdaq, and S&P500 were up 3.1%, 5.0%, and 3.3% for the week and 14%, 18%, and 15% for the month, respectively. The Nasdaq has even pulled into positive territory for 2009, up about 2%. The top corporate news for the week was an earnings blowout by BlackBerry maker Research in Motion and a looming bankruptcy for General Motors. RIMM stock surged 32% and GM lost 42%. As a BlackBerry owner with iPhone envy, your narrator is considering a short position in RIMM.
Bonds
Two weeks ago the Fed announced that it would begin purchasing long-dated Treasury securities, immediately sending yields down and prices up. The rally in the equities markets however has begun to entice some investors back into riskier investments. After briefly dipping below 3.5% the yield on the 30-year Treasury rebounded and closed the week at 3.72%. The yield on the 10-year also ended the week higher at 2.91%. The TED spread continues to fall, generally a good indicator for thawing credit markets. The spread currently stands at 96bps.
What to look for next week:
It is a slow week for economic data, but keep an eye out for the international trade balance on Thursday. Consensus is for net trade balance of $36 billion net deficit, a six year low. The slowing economy and strengthening dollar have resulted in US consumers buying up fewer imports.
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