Market Analysis

Both bonds and stocks opened up slightly better this morning with the Dow over the 11,200 mark and the US 10 Yr Treasury just below the 3.8% mark at a yield of 3.78%. Treasury bills are stronger on expectations that this week’s $115 Billion of Treasury notes will be well bid by foreign central banks moving funds into US treasuries while they watch what unfolds with the Greek financial crisis. Stocks continue to be buoyed by the strength of quarterly earnings and the perception that, while improvement in the employment sector is lagging, the recession is most likely over. Expectations for the advance estimate of 1^st Qtr 2010 GDP growth are for 3.2% growth compared to 5.6% growth in 4^th Qtr 2009.

The economic calendar for this week is recapped below:

Monday, April 26, 2010

• US Treasury auctions $11 billion of 5-year inflation indexed notes.

Tuesday, April 27, 2010

• February Case-Shiller 20 City Index – the market expects the monthly decrease in home prices to be .1% compared to a .7% decrease in January and, on a year-over-year basis the market expects a 1.1% increase in home prices for this index.
• April Consumer Confidence – expectations are for a reading of 53.7 vs a 52.5 reading in March
• First day of a two-day Federal Open Market Committee (FOMC) meeting
• US Treasury auctions $44 billion of 2-year notes

Wednesday, April 28, 2010

• US Treasury auctions $42 billion of 5-year notes
• FOMC Meeting Conclusion, Rate Decision and Post Meeting Statement – the market expects no change in either the Federal Funds Rate or the Discount Rate and for the Federal Reserve to remain cautious about economic recovery due to unemployment hovering near 10% with no clear signal that it will improve significantly this year.

Thursday, April 29, 2010

• Initial Jobless Claims for the week ended 4/24/2010 – expected to drop by 16,000 to 440,000.
• Continuing Jobless Claims for the week ended 4/17/2010 – expected to drop by 21,000 to 4.625 million.
• US Treasury auctions $32 billion of 7-year notes

Friday, April 30, 2010

• Advance Estimate for Qtr 1 2010 GDP – expected 3.2% growth compared to 5.6% growth for the 4^th Qtr 2009.
• April Final University of Michigan Consumer Sentiment Index – expected 71.5 reading vs initial reading of 69.5 earlier this month.
• April Chicago Purchasing Manager’s Index (PMI) – expected up to 59.8 vs 58.8 in March