U.S. Economic Data Looking Brighter
The euro-zone miseries have abated thanks to European Central Bank (ECB) efforts, but it’s clear from last week that they have not been solved. The latest flare-up in Cyprus is a reminder that Europe’s banking system still has a number of weak spots. Interestingly, (thankfully?) markets in the U.S. haven’t shown much concern and as of this morning it looks like a bailout has been completed. So while concerns will likely linger due to undercapitalized euro-zone banks and an ongoing European recession, the promises of increased liquidity from the ECB has bought policy makers more time and has had a calming effect.
Here’s a recap of how the market did last week.
U.S. Economic Data
U.S. economic data continues to paint a brighter overall picture. Weekly initial jobless claims were below 340,000 for the second consecutive week. That’s the first time we have seen back-to-back week reports below 340,000 since November of 2007.
Housing continues to gain a stronger and stronger foothold, with housing starts and building permits rising once again. Existing home sales in February rose for the 4th month in 5 and hit a 3-year high.
Finally, the Federal Reserve meeting last week ended with little ballyhoo (I’ve been DYING to use that word). Policy makers acknowledged that the economy is expanding at a modest pace, and its bond buying program will continue at a rate of $85 billion per month. So no change and no real excitement there – I think they keep looking at job improvements as a gauge for when they will change those purchases.
Our opinion remains that investors who are fully invested remain that way and investors with cash positions tactically invest portions of that cash position on any market pullbacks.
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David B. Armstrong, CFA
President & Co-Founder
Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....
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