The release of results from the long-awaited bank stress tests have been delayed until Thursday, but word has leaked that Citi needs another $10 billion. Three more banks were taken over Friday, one of which, Silverton Bank in Atlanta, could cost the FDIC $1.3 billion from its reserves. The first reading for Q1 GDP came in worse than expected at -6.1% (annual rate) versus consensus of 5.0%. Investors cheered the data however because of a significant decline in inventories indicating that companies will have to begin increasing output to keep up with demand.
Equities:
Stocks ended the week higher with the S&P500 up 1.3%, the Dow up 1.7% and the Nasdaq up 1.5%. On the year the S&P500 is down 2.8%, the Dow down 6.4% but the Nasdaq is up 9.0%. Some lucky investors were able to make almost 300% in a matter of a couple hours on Tuesday. Biotech company Dendreon was scheduled to release test results for a prostate cancer treatment drug at 12:30pm Tuesday. Minutes before the release a massive sell order hit the market immediately pushing the stock from $25 to under $8. The Nasdaq halted trading on the shares to investigate. The results of the drug turned out to be positive and the stock reopened in after hours Tuesday back at $25.
Bonds:
Yields on Treasuries jumped significantly this week as an appetite for risk began to lure investors away from risk-free assets. The 30-year ended the week yielding 4.09% and the 10-year ended at 3.17%. This marks the first time since mid-November that the 30-year yield has topped 4%. High yield bonds had a good week with the ETF JNK gaining 3%. At its current price this ETF yields about 15%.
What to look for next week:
Next week is slow as far as data are concerned. The most significant release will be Friday morning with the release of the employment situation for April. Consensus is for 630k new job losses, a slight improvement over last month's 663k losses. Consensus unemployment rate is 8.9%.
Equities:
Stocks ended the week higher with the S&P500 up 1.3%, the Dow up 1.7% and the Nasdaq up 1.5%. On the year the S&P500 is down 2.8%, the Dow down 6.4% but the Nasdaq is up 9.0%. Some lucky investors were able to make almost 300% in a matter of a couple hours on Tuesday. Biotech company Dendreon was scheduled to release test results for a prostate cancer treatment drug at 12:30pm Tuesday. Minutes before the release a massive sell order hit the market immediately pushing the stock from $25 to under $8. The Nasdaq halted trading on the shares to investigate. The results of the drug turned out to be positive and the stock reopened in after hours Tuesday back at $25.
Bonds:
Yields on Treasuries jumped significantly this week as an appetite for risk began to lure investors away from risk-free assets. The 30-year ended the week yielding 4.09% and the 10-year ended at 3.17%. This marks the first time since mid-November that the 30-year yield has topped 4%. High yield bonds had a good week with the ETF JNK gaining 3%. At its current price this ETF yields about 15%.
What to look for next week:
Next week is slow as far as data are concerned. The most significant release will be Friday morning with the release of the employment situation for April. Consensus is for 630k new job losses, a slight improvement over last month's 663k losses. Consensus unemployment rate is 8.9%.
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