Monday Trading Cheat Sheet: 3 Stories That Moved Markets

It was a red day for Mr. Market on Monday. At the close:

DJIA: -1.79% to 14,599.20 S&P 500: -2.30% to 1,552.36 NASDAQ: -2.38% to 3,216.49
Gold: -$154.30 to $1,347.10 per ounce Oil: -3.87% to $87.76 per barrel U.S. 10-Year: -0.038 points to 1.685%

Here are three stories that helped shape the markets on Monday:

1) Here’s Evidence of a Spring Economic Slowdown: Another sign that a spring economic slowdown has begun was given to stock marketinvestors and analysts Monday morning. The Federal Reserve’s Empire State Manufacturing Survey — a monthly study based on the responses of roughly 175 manufacturing executives in New York State — showed that business activity is slowing.

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The Empire State manufacturing index was largely positive in March, giving a reading of 9.24, well above the level of zero that separates expansion from contraction on the scale. That reading was just below February’s 10.04, but significantly above the consensus reading of 7.8 set for April by analysts polled by MarketWatch… (Read more.)

2) Federal Reserve: Who is Monetizing Debt? Not Us: Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, rebutted criticism that that the central bank’s policies are monetizing national debt or encouraging deficit spending. Federal officials under the leadership of Chairman Ben Bernanke have said that they would not try to monetize debt by increasing the money supply and stimulating inflation. Instead, Bernanke has encouraged President Obama and Congress to enact a sustainable fiscal policy.

Lockhart emphasizes that increases in the government’s debt and the accomodative monetary policy does not mean that they are connected and stresses the importance of fiscal reform. For the fiscal year that is supposed to begin October 1, the forecasted deficit is $744 billion, which is 4 percent of the economy. The estimated shortfall is $973 billion, which is 6 percent of the economy… (Read more.)

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3) China Cools Down in Q1: Data released on Monday morning by the Chinese government suggests that the nation’s economy didn’t grow as fast in the first quarter of 2013 as analysts were expecting. To be clear, the China was guiding more mild growth for itself than the analyst consensus. First-quarter gross domestic product increased 1.6 percent on the quarter and 7.7 percent on the year. This compares against expectations for 8.0 percent year-over-year growth.

This downside surprise is likely the result of lower-than-expected industrial production, which grew 8.9 percent year over year instead of the 10 percent anticipated. All categories advanced, with automobiles up 12.4 percent. Retail sales figures for March, also released on Monday, showed a 12.6 percent year-over-year increase, which was just 0.2 points shy of expectations. This increase includes a 5.5 percent increase in automobile sales, which is slower than the rate for the first few months of the year. Sales of communications equipment increased 16 percent, a faster rate than in February.

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