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Fed Chairman Comments Give Markets A Boost
« on: July 13, 2011, 03:43:12 PM »
Daily Market Commentary for July 13, 2011

U.S. stocks climbed nicely higher on Federal Reserve Chairman Ben Bernanke testimony in front of U.S. House of Representatives Financial Services Committee. (read more at Millennium-Traders.Com)

Summarized comments from Federal Reserve Chairman Ben Bernanke as he testified in front of the U.S. House of Representatives Financial Services Committee: Interest rates exceptionally low for extended period; Fed has additional tools to support economy; Fed policy ready to respond as circumstances warrant; Will sell down portfolio when circumstances warrant; Holding bonds continues to push interest rates down; Bond-Buying program has eased financial conditions; Bond-Buying program has reduced borrowing costs; Fed sees significant slowing of inflation in 2H; Rise in inflation likely transitory; Household spending should rise in medium term; Consumer spending a key to pace of recovery; Long-Term unemployment imposing severe hardships; Jobless rate seen at 8.6% - 8.9% in 4Q; Reiterates '13 GDP forecast at 3.5% - 4.2%; Pace of recovery will pick up in coming quarters; Oil price stabilizing, easing pressure on households; Pace of economic recovery modest so far; Current fiscal path could lead to higher interest rates; Short-Term spending cuts could hurt recovery; Not raising debt limit could lead to economic problems; Price of gold reflects a number of factors; Default on debt would be a major crisis; Negative effects of debt default would be immediate; Default on debt would cause global shockwaves; U.S. jobs situation in crisis; Fixing housing market could help unemployment issues; Overhaul of tax code needed; 'Excited' by potential of large-scale deficit deal; Debt limit failure would hurt economy, make deficit worse; Lack of clarity, confidence hurting housing market; Spending cuts should be made over long term; Keeping inflation stable helps dollar; Dollar decline has influenced oil prices; Economy still requires a good deal of support; Third round of quantitative easing possible; Have to keep all options open to help economy.

Comments from Federal Reserve Bank of Boston President Eric Rosengren: Monetary policy has leeway to stay easy; Commodity prices stabilizing or in retreat; Weak job market helping blunt inflation; June jobs data was 'dismal'; U.S. will grow slower than expected this year; U.S. likely grew 2% over 1H, to grow 3%-3.5% in 2H; Last two years have been 'consistently weak'; Recovery defined by slow, not strong, growth; Recent soft patch reflects economy's enduring weakness; Fed needs easy policy to help job creation process; Government Austerity creates need for easy policy stance; Continued weakness argues for aggressive policy.

U.S. Fed: Debt ceiling debate hasn't affected treasury prices yet; China currency has depreciated on trade-weighted basis; European bank exposure to Greece, Ireland a concern; Markets resilient despite shocks in Middle East, Japan, Europe; Timing of supply, demand adjustments uncertain; China, emerging economies driving commodity demand; High commodity prices likely to prompt more supply; Treasury demand to be supported by uncertainty in Europe; Notes rating agencies' warnings on debt limit, deficits.

Amazon.com (NasdaqGS: AMZN) hosting a gain of over 5 points into early afternoon trading.

Transcept Pharmaceuticals (NasdaqGM: TSPT) shares sank by 40% after reporting that the U.S. FDA will reject its application to market the insomnia drug Intermezzo.

Investment Technology Group (NYSE: ITG) shares were lower by 16% after reporting they expect Q2 losses between $4.62 and $5.18 a share and would be carrying out cost-cutting.

Clean Energy Fuels (NasdaqGS: CLNE) shares surged higher by 13% after reporting that Chesapeake Energy (NYSE: CHK) announced that they would invest $150 million over three years to fund the development of liquefied natural-gas truck-fueling stations.

Kinetic Concepts (NYSE: KCI) shares rose 5% on buyout offer from a private-equity consortium in a deal worth $6.3 billion or $68.50 a share in cash.

Economic data released today:

MBA Mortgage Applications: U.S. MBA Refinance Index -6.2% at 2,217.3 compared to last week 2,363.6; U.S. MBA Purchase Index -2.6% at 183.9 compared to last week 188.9; U.S. MBA Market Index -5.1% at 481.3compared to last week 507.0.

Chicago Fed Financial Conditions Index -0.63 in week to July 8 and Chicago Fed Adjusted Financial Conditions Index -0.95 in week to July 8.

Import Price Index: U.S. June Petroleum Import Prices -1.6%; U.S. June Non-Petroleum Import Prices -0.2%; U.S. June Import Prices -0.5% vs. Consensus -0.7%.

Crude Oil Inventories as released by DOE: U.S. Refineries ran at 88.0% capacity vs. seen 88.60% capacity; U.S. Distillate Stockpiles +2.967 Million Barrels in the week vs. seen +0.2 Million Barrels; U.S. Refineries ran at 88.0% capacity vs. 88.4% capacity a week ago; U.S. Distillate Stockpiles +2.967 Million Barrels at 145.028 Million Barrels; U.S. Gasoline Stockpiles -0.84 Million Barrels in the week vs. seen +0.1 Million Barrels; U.S. Gasoline Stockpiles -0.84 Million Barrels at 211.699 Million Barrels; U.S. Crude Oil Stockpiles -3.124 Million Barrels in the week vs. seen -1.3 Million Barrels; U.S. Crude Oil Stockpiles -3.124 Million Barrels at 355.456 Million Barrels.

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