Markets Continue Slide As Investors Await Fed QE3, May 12 2012 Jobless Claims, Philly Fed Weak:
U.S. equities continued to slide as more economic bad news came in with no reassurance from the Fed they might extend monetary policy to keep markets afloat and stimulate investment toward risky assets. The S&P 500 took a drubbing today as news about JP Morgan losing an additional $1 billion dollars on supposed “hedging” made headlines.
Jobless Claims Weak
Jobless claims remained at a seasonally adjusted 370,000 which was more than expected by economists. Jobless claims for the week ended May 12, 2012 suggest the jobs market isn’t making a comeback and we expect the monthly jobs report to be lackluster. April unemployment came in at 115,000 new jobs while the prior month’s unemployment growth was 120,000 jobs.
Philadelphia Fed May 2012 Manufacturing Survey Negative For First Time In Eight Months
The Philly Fed confirmed weakness in the overall economy. The Philadelphia Fed monthly manufacturing survey was negative for the first time in eight months. The manufacturing survey reading was -5.8 compared to 8.5 last month.
The general weakness in the market was overshadowed by Facebook’s upcoming IPO and no news from the ECB or the Fed today gave investors no assurances that bidders could return. Greece looks more likely to leave the EU and global equities markets are in a downtrend with support levels far below current trends.
We expect the jobs data for May 2012 to be weak and the U.S. 10 year note yield closed at an all time low of 1.702 percent. If the Fed wants investors to assume more risk, it isn’t happening right now.