Morning Market Roundup: Fed to Buy More Bonds? Home Prices up, EU Unemployment All-Time High
- Posted on July 31, 2012 at 10:22am by
Becket Adams
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Here’s what’s important in the business world this morning:
Fed Action: The Federal Reserve appears to be moving toward announcing some new step to try to energize the troubled U.S. economy.
Fed officials have signaled their concern about weakening job growth and consumer spending, which have brought the economy closer to a standstill. Chairman Ben Bernanke has said the Fed is prepared to take further action if unemployment stays high.
If the Fed does announce further bond buying, some think the purchases might be divided between Treasurys and mortgage-backed securities. Though at record lows, mortgage rates are still higher than rates on some other loans. Further declines in those rates could help fuel home sales.
The Fed meeting is one of three big events this week that investors and economists will pay close attention to. The European Central Bank meets on Thursday, and the U.S. Labor Department releases the July jobs report on Friday.
U.S Home Prices: Home prices rose in May from April in every city tracked by a leading index, a sign that increasing sales and tight inventories are supporting a modest housing recovery.
The Standard & Poor’s/Case-Shiller home price index released Tuesday showed increases in all of the 20 cities tracked. And a measure of national prices rose 2.2 percent from April to May, the second increase after seven months of flat or declining readings.
The increases partly reflect the impact of seasonal buying. The month-to-month prices aren’t adjusted for seasonal factors.
In the past year, the 20-city price index has dropped 0.7 percent, the smallest decline since September 2010. That’s much lower than the 1.8 percent year-over-year decline in April.
Consumer Spending: Americans spent no more in June than they did in May, even though their income grew at the fastest pace in three months.
The Commerce Department said Tuesday that consumer spending was flat in June after declining 0.1 percent in May.
Income rose 0.5 percent. And wages, the largest component of income, also increased 0.5 percent, the biggest gain since March.
The jump in income went straight to savings. The savings rate rose to 4.4 percent in June, the highest level in a year.
EU & Unemployment: The number of people unemployed across the 17 countries that use the euro hit a record high in June, official figures showed Tuesday, in a stark reminder that Europe’s debt crisis has ramifications beyond the financial markets.
Eurostat, the EU’s statistics office, said 17.801 million people were out of work in the eurozone in June. That was 123,000 more than May, and is the highest level since the euro was formed in 1999. The increase was the 14th in a row and means that around 2.25 million people have lost their jobs since April 2011.
Without Germany’s relatively-low unemployment rate of 5.4 percent, the wider figures would be much worse. Even then, the eurozone unemployment is nearly three percentage points higher than the U.S.’s equivalent 8.2 percent.
U.S. Futures: U.S. stock futures moved higher Tuesday ahead of a two-day policy meeting at the Federal Reserve.
Markets have grown increasingly confident that the Fed will act again to kick-start the economy, but when it will do so is the topic of debate on Wall Street.
Dow Jones industrial futures rose 24 points to 13,025 and the broader S&P futures added 2.8 points at 1,383.30. Nasdaq futures gained 10.25 points at 2,646.
The Associated Press contributed to this report.
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Penn
Posted on July 31, 2012 at 2:01pmIn 1900, a first class tradesman earned about .50/hr and gold was $20.12/oz. Today, a first class tradesman earns about $35/hr and gold is $1,600/oz. The more things change the more they stay the same, that is unless you’ve got a printing press in your basement and a society gullible enough to trade real stuff for worthless stuff.
Report Post »landofaahs
Posted on July 31, 2012 at 11:25amA farmer(Modern democrat plantation owner) raises pigs(entitlement society) and is responsible for feeding them(food stamps welfare etc.) and treats them when they are sick (obama care). He regulates what they eat and when they eat and how much they eat until at ladt he takes his pigs to markets and sells them for slaughter.
Report Post »There are some personal activists(conservatives who believe in freedom and personal responsibility) want to set those pigs free but alas the plantation owners(democrat party) claim that they are the ones who really care for them, after all, who feeds them and takes care of them?
whatthecrazy
Posted on July 31, 2012 at 11:22amPersonally i don’t care what gets better, i’m not voting for the criminal in our Whitehouse.Speaking of the WH will it ever be truly sanitized of this administration when they are finally gone?Im sure Alah has his nasty stamp all over it not to mention all the nasty terrorist who have been invited to it.uggg
Report Post »GeorgeWashingtonslept here
Posted on July 31, 2012 at 11:15amWow, no kidding. EU unemployment at an all time high? Hey EUROPE, we have a great man to give to you if you want him. He can fix everything with all the Hope and Change one can take………
Report Post »Individualism
Posted on July 31, 2012 at 11:07ambuy those bonds the bankers will buy them up and you will make a profit lol.
Report Post »Micmac
Posted on July 31, 2012 at 10:38amTime for another round of inflation thru the action of the Fed to prop up NoBama and give him more NoBama Money. We have a massive supply of money on the sidelines waiting for a positive investment environment. Therein lies the economic problem, a bad economic environment, with NoBama and his Progressive/socialist cronies like Franks creating bills that stiffle investments.
MoMoney just weakens the dollar and you pay more for goods like food and gas, as disposable income is a current luxury. But it will be just a footnote in the LSM. This will do little but a blip for Main Street while Wall Street will speculate on the increased money supply (well they already are).
NoBama > MoBama
Report Post »Snowleopard {gallery of cat folks}
Posted on July 31, 2012 at 10:36amSo the foreshocks of the massive collapse continue, and the government and most of the world continue to deny the impending, obvious ruination and global reset that is occuring. Typical.
Report Post »contkmi
Posted on July 31, 2012 at 10:33amSo, is the Fed going to print more money so it can buy back bonds and stuff? Yeah, great idea…
Report Post »kadster01
Posted on July 31, 2012 at 10:57amExactly! Why does Wall Street get excited about this?! Why is creating value where there is no value, and thus weakening the dollar and increasing inflation, good news to investors? I don’t get the thinking of the bi-polar stock market at all, and I wouldn’t invest one penny of my money in it right now.
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