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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • U.S. stocks fell at the open, after the Standard & Poor’s 500 Index yesterday posted its biggest gain in five weeks, as technology stocks resumed declines following a two-day rebound and investors awaited corporate earnings.
  • Global PC shipments fall for eighth straight quarter.
    • PC shipments in the March quarter were down 4.4 % compared with the same quarter in 2013, IDC said. Gartner, a rival market research company, said in a news release that PC shipments in the March quarter fell 1.7 %.
    • Gartner said total PC shipments in the first quarter were 76.6 million, while IDC said 73.4 million PC were shipped.
    • Intel, central to the PC industry, is due to post its first-quarter results on Tuesday.
  • Apple’s chief designer Jony Ive, who Steve Jobs called his “spiritual partner,” is gaining more authority over the look of the company’s products. Ive is taking full control of the team that designs Apple’s iOS software that powers iPhones and iPads.
  • EBay and Carl Icahn ended their proxy fight. The activist investor dropped his proposal that the e-commerce company split off its PayPal payments unit and withdrew his two nominees for the eBay board.
    • Icahn in January called for the company to hive off its fast-growing PayPal business, arguing the unit is undervalued as part of eBay.
  • Amex, Citigroup, and Discover win dismissal of card arbitration case. The lawsuit accused them of colluding to adopt arbitration clauses that prevent credit card holders from pursuing class action lawsuits in court. Judge said the plaintiffs had failed to show that the defendants violated the Sherman Act, a federal antitrust law.
  • Ally Financial shares fall in debut. The IPO raised $2.38 billion after the U.S. Treasury sold 95 million shares at $25 per share.
    • The Treasury, which had bailed out Ally for $17.2 billion during the 2008 financial crisis, said that with the IPO it had so far made a profit of $500 million on its investment, including dividends and interest payments.
    • The Treasury now has a stake of 17.1 % in Ally.
  • Facebook will no longer let users send and receive private messages within its main smartphone app, and will require that users install a separate messaging app.
    • Facebook faces increasing competition from a new crop of fast-growing mobile messaging apps, such as Snapchat and Line. It stunned observers by announcing plans in February to buy the popular WhatsApp messaging app for $19 billion.
  • Wal-Mart partners with Wild Oats to roll back prices on organic food. The move could help revive Walmart’s flagging grocery sales and boost the profile of the resurrected Wild Oats brand.
    • Organic foods accounted for roughly 4 % of total U.S. food sales in 2012. Organic food sales were up 10.2 % to $29.0 billion in 2012.
  • The Pimco Total Return Fund, the world’s largest bond fund, cut its holdings of U.S. government-related securities and mortgages for the second straight month in March on continued bets that the Federal Reserve will conclude bond purchases this year. On March 7, Gross tweeted that investors should “Sell what the Fed has been buying because they won’t be buying them when Taper ends in October.”

US ECONOMY & POLITICS

  • Jobless claims near seven-year low. Initial claims for state unemployment benefits dropped 32,000 to a seasonally adjusted 300,000. That was the lowest level since May 2007, before the start of the 2007-09 recession. Economists had forecast first-time applications for jobless benefits falling to 320,000.

blog 4-10-14

  • The four-week moving average for new claims fell to 316,250, down 4,750 from the previous week.
  • The claims report showed the number of people still receiving benefits after an initial week of aid fell 62,000 to 2.78 million in the week ended March 29. That was the lowest level since January 2008.
  • Layoffs are trending lower and hiring is regaining some momentum after being held back by unusually cold weather, snow and ice storms in December and January.
  • Import prices increased 0.6 % last month after rising 0.9 % in February. The increase exceeded economists’ expectations of a 0.2 % rise and was driven by food prices.
    • Last month, import food prices jumped 3.7 %, the biggest rise since March 2011. Imported fuel prices rose 1.2 % last month after advancing 5.3 % in February.
    • In the 12 months through March, import prices fell 0.6 %, pointing to continued weak imported inflation that is helping to keep a lid on domestic price pressures.
    • The lack of inflation pressures in the economy suggest the Federal Reserve could keep monetary policy very accommodative for a while.
  • Export prices increased 0.8 % in March. That followed a 0.7 % rise in February. In the 12 months through March, export prices gained 0.2 %.
  • At least six months between end of QE and rate rise, Chicago Fed President Charles Evans told.
  • Fed to hold rates until at least July 2015, says slim majority. Results of the survey of 69 economists based in the United States, Europe and Canada were similar to those in a poll of 18 primary dealers.
    • While 33 of the 69 economists expect the bank to hike the Fed funds rate from the current 0-0.25 % by the end of June 2015, 31 expect it to happen in the second half of that year and five said it would be early 2016.

EUROPE & WORLD

  • Bonds buoyed by Greek return as equity gains fizzle out. Just two years after being at the epicenter of the euro zone’s sovereign debt crisis, Greece drew solid demand at a five-year bond sale that aimed to raise 3 billion euros and offered a yield of 4.95 %, beating Athens’ 5 % target. In Europe, investors looked optimistically to Greece’s successful bond market return for further evidence that the euro zone’s economic recovery is gathering pace.

TODAY in HISTORY

  • The U.S. patent system was formed (1790)
  • Titanic set sail on its fateful voyage (1912)
  • Paul McCartney announced the official split of the Beatles (1970)
  • The U.S. House passed the “Amber Alert” bill. It provided a system for alerting the public about missing or abducted children (2003)

Sources: Reuters, Bloomberg.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. 

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