Friday’s Mid-Day Movers: 3 Stories Driving Markets
The U.S. equity markets were simmering in minor losses on Friday afternoon. Underwhelming industrial production data cast a generally gloomy pall over trading activity as investors tuned in to news coming out of the G20 meeting in Moscow.
At 1:00 p.m.: DJIA: -0.05%, S&P 500: -0.15%, NASDAQ: -0.08%.
1) The U.S. Federal Reserve reported industrial production figures that came in below expectations. Friday’s preliminary report showed a 0.1 percent decline in the total industrial production index, compared to expected growth of 0.2 percent. The weaker-than-expected report was led by a 0.4 percent decline in manufacturing, which represents 75 percent of total production.
But it wasn’t all bad news. Revised data for November and December showed the biggest two-month gain since 1984. Together with construction, the industrial sector accounts for the majority of the variations in national output over the course of the business cycle, and therefore these measurements provide an important reading of the health of the economy. While January’s dip is unfortunate, hope remains that February’s numbers will come in stronger… (Read more.)
2) The G20 finance ministers are meeting in Moscow, where brewing currency tension among major economies within the group have quickly taken center stage. With global economic growth tepid at best, competitive currency devaluation has been the subject of speculation among market participants and national governments. Japan, in particular, has become a centerpiece of this conversation, as the country’s strategy to reverse ‘stagflation’ and spur economic growth hinges on the aggressive weakening of the yen… (Read more.)
3) Despite all the political rhetoric in Washington D.C. and the fiscal cliff, consumer sentiment in the United States managed to climb higher and beat expectations, according to preliminary data released on Friday. The Thomson Reuters/University of Michigan February index of consumer sentiment increased from 73.8 to 76.3, ahead of median forecasts for growth to 74.8.
Richard Curtin, survey director, explained in a statement that households with incomes below $75,000 were among the most optimistic, “with expected gains in employment more than offsetting declines in after-tax incomes due to the end of the payroll tax cut.” (Read more.)