This morning’s economic data had little effect on the Bond markets, as both the final Gross Domestic Product (GDP) for 4th Quarter and Initial Jobless Claims came in near expectations.
Final GDP was revised down to -6.3% for the 4th quarter of 2008, and while this was the worst reading in 26 years, it was slighly better than the -6.6% level expected. Unsurprisingly, the labor market continues to struggle…Initial Jobless Claims came in at 652,000, near estimates of 650,000. The number of people collecting state unemployment benefits has reached yet another new record, jumping 122,000 to a seasonally adjusted 5.56 Million.
What the job market and overall economy need the most is some positive direction towards fixing the financial sector. April 2nd should be a big day, as the Financial Accounting Standards Board (FASB) is set to announce their ruling on whether to modify mark-to-market, and perhaps allow cash flow analysis to determine valuation of financial assets. We believe the strength we have seen in Stocks over the past couple of weeks has been fueled by speculation that mark-to-market will be modified, thereby helping reinvigorate the financial system of our country.
And also newsworthy, Chair of the Securities and Exchange Commission Mary Shapiro is commenting on the SEC’s consideration of a reinstatement of the Uptick Rule in early April - also something we have discussed many times in the past. Although the Uptick Rule may be reinstated, it will take a few months to allow for traders to make software programming changes, before the Uptick Rule goes live.
