Daily Market Commentary for July 14, 2011
According to the Labor Department, new applications for unemployment benefits fell last week to the lowest level seen in three months, suggesting fewer layoffs in early July than usual. (read more at Millennium-Traders.Com)http://www.millennium-traders.com/news/newscommentary.aspx
Summarized comments from Federal Reserve Chairman Ben Bernanke in an appearance before the U.S. Senate Banking Committee: Don't anticipate Spain, Italy will need bailouts; U.S. states need to focus on unfunded liabilities; Italy's fiscal position better than Greece; Have seen 'market jitters' around Italy; Debt default would hurt labor market, lending; Reiterates no immediate plans to start new bond buying; U.S. direct exposure to EU debt woes not sizable; U.S. economy is at risk from Europe debt woes; Consumer confidence remains low; Consumer, small business lending still constrained; Default would destroy trust of investors in U.S.; Policy makers need to clarify housing finance plan; Weakness in housing market weighing on recovery; Economic recovery 'rather fragile'; Not currently prepared to take further action on economy; Congress needs to do something 'Big' on budget; Fed could not offset impact of debt default; Monetary policy not a panacea for economy; U.S. Treasurys 'Fundamental Element' for market liquidity; U.S. must make clear committed to Fiscal changes.
"Were there to be a significant deterioration in conditions in Europe we would see a general increase in risk aversion, declining asset prices, a lot of volatility," Bernanke said in an appearance before a U.S. Senate panel.
"The direct exposures ... are quite small and manageable so we would not expect those direct impacts to be the critical channel if there were problems, a default for example," Bernanke said.
â€œWe are not prepared at this point to take further action,â€ Bernanke told the Senate Banking Committee, in the second of two days of testimony to Congress on monetary policy.
â€œWe would like see if, in fact, the economy does pick up as we are projecting,â€ Bernanke said.
â€œWe are not proposing anything today,â€ he said, â€œThe main message I want to leave is that this is a serious situation. It involves significant loss of human and economic potential. We want to make sure we have the options when they become necessary.â€
â€œWe have to keep all the options on the table,â€ Bernanke said.
â€œWe donâ€™t know were the economy is going to go,â€ he said.
Comments from Senator Harry Reid: Some Republicans 'will not Listen to truth' on Debt Ceiling; Interest Rates would rise if U.S. defaults on obligations; Default would end up costing U.S. Trillions.
Comments from Dallas Federal Reserve President Richard Fisher: Worried lean U.S. firms will pass on higher input costs; Will advocate tightening if inflation pressures mount; Hopes 3% growth rate can be sustained; Much of growth will be due to inventory rebuilding; Sees growth between 3%-4% over 2nd half 2011; More optimistic on outlook than consensus.
Medicis Pharmaceutical (NYSE: MRX) shares were lower by 3% into mid-day after reports that a woman was found dead at Chief Executive Jonah Shacknai's California home. The woman identified as Shacknai's girlfriend, was found in the courtyard of Shacknai's Coronado, Calif., mansion on Wednesday.
Jazz Pharmaceuticals (NasdaqGM: JAZZ) shares climbed 5% by mid-day trading.
Icagen (NasdaqGM: ICGN) shares were higher by 19% mid-day, on speculation it will soon be bought by development partner Pfizer (NYSE: PFE). Pfizer already holds approximately 14% stake in ICGN.
Universal Forest Products (NasdaqGS: UFPI) shares soared by 20% into mid-day trading after company released better-than-expected quarterly earnings report.
Judge Reggie Walton, federal judge presiding over Roger Clemens' trial for allegedly lying to lawmakers about the use of performance-enhancing drugs may declare a mistrial. Walton raised the possibility after jurors heard details of the case that he had ruled were inadmissible. "I can't in good faith leave this case in a situation where a man's liberty is at risk when the government should have taken steps to ensure that we were not in this situation,'' Walton said. "I don't see how I can un-ring the bell.''
Economic data released today:
Retail Sales: U.S. June Retail & Food Sales Excluding-Autos Unchanged; U.S. June Retail & Food Sales +0.1% vs. Consensus -0.2%.
PPI: U.S. May Retail & Food Sales Revised to -0.1% from -0.2%; U.S. May PPI Unrevised at +0.2%; U.S. June Passenger Car Prices +0.2%; U.S. June PPI Energy Prices -2.8%; U.S. June PPI Crude Goods -0.6%; U.S. Jun PPI Core +1.1%; U.S. June PPI Intermediate Goods Unchanged%; U.S. Jun PPI Intermediate Goods Core +0.3%; U.S. June PPI excluding Food & Energy +0.3% vs. Consensus +0.2%; U.S. June Producer Prices -0.4% vs. Consensus -0.2%.
Initial Jobless Claims: U.S. Jobless Claims Revised for week of July 2 to 427K from 418K; U.S. Jobless Claims for week of July 9 -22K to 405K compared to survey -3K.
Continuing Jobless Claims: U.S. Continuing Claims for week of July 2 +15K to 3,727,000.
Business Inventories: U.S. May Business Inventories +1.0% compared to expectations of +0.8%.
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