Dow: 13,486 (+0.54%) S&P 500: 1,447 (+0.96%)
We assume Wall Street is excited for the Avicii concert tonight in Midtown Manhattan – anticipation for the DJ’s live music had to help stocks finally finish positive after 4 straight negative days. Regardless of their interest in computer-generated symphonies, investors were mainly focused in the huge amount of US econ data released today, which included GDP, jobs, housing and manufacturing numbers. Although the hefty American data came in mixed, economic developments with Spain’s budget plan eased fears after yesterday’s European riots. The Dow advanced 72 points for its biggest rise in 2 weeks.
GDP revised down to 1.3% growth and Durable Goods Orders dip…
We’ve got a lot for you here, so we’ll go in order of importance. First up, Gross Domestic Product – the measure of how much goods/services our economy is creating. Each month, the Commerce Department takes another look at its analysis of our GDP and today unexpectedly revised its previous reading down from 1.7% annual growth to 1.3% annual growth in the 2nd quarter (which stretched from April-June). Investors were concerned because this is notably lower than the 2% GDP growth of the 1st quarter. Adding insult to injury, durable goods orders for big-ticket items like cars and lawn toys owned by Mike Tyson dropped by 13% over the last month, much more than forecast.
…Weekly Jobless Claims fall, but Pending Home Sales lag
On the bright side, the number of Americans filing for unemployment claims over the last week dropped to its lowest level since July. Weekly jobless claims have slowly increased over the past month, but dropped by a whopping 26,000 today to reach 359,000 claims total – the labor market improvement probably has something to do with all the new Chop’t salad bars sprouting up our area. But in a sign that the housing market still has some room to recover, fewer Americans than expected signed contracts to buy previously own homes last month. Data over the past week has shown home prices increasing and the housing market as a whole bottoming out and starting to finally improve after getting crushed since late 2006 – but investors hope to see more positive new and previously owned sales numbers.
Spanish 2013 federal budget slashes benefits and raises taxes to save €13 billion
Prime Minister Mariano Rajoy ended the Spanish tradition of early retirement and announced tax increases and spending cuts that will save the fútboling nation 13 billion euros next year. Announcing such huge austerity measures the day after Madrid exploded with riots and violent clashes with police to protest austerity, we’re impressed by Rajoy’s (fút)balls. Investors remain concerned that social unrest will hamper the government’s ability to manage the debt, but they still rewarded Spain’s commitment to reigning in the debt but reducing the borrowing cost on 10-year bonds to below 6%.
- Another big helping of US consumer data – Consumer Spending & Personal Income for August, Reuters/University of Michigan Consumer Sentiment Poll for September
- Int’l – Chinese Manufacturing Index, French 2nd Quarter GDP and German Retail Sales
- Struggling BlackBerry relic Research in Motion (RIMM) announced not-too-shabby earnings after the market closed today – we’ll see how shares perform tomorrow…
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