It’s been a red Monday for Mr. Market. Gold sold off sharply despite ongoing economic uncertainty in the euro zone and weaker-than-expected economic data out of China.
|DJIA: -0.91% to 14,729.50||S&P 500: -1.05% to 1,572.20||NASDAQ: -1.40% to 3,248.87|
|Gold: -8.37% to $1,375.70 per ounce||Oil: -2.90% to $88.64 per barrel||U.S. 10-Year: -0.014 points to 1.708 percent|
1) Are Investors Looking For Safe Bets Outside of the U.S.? The U.S. Treasury Department released Treasury International Capital data for February on Monday. The TIC tracks the flows of financial instruments such as Treasury securities, agency securities, corporate bonds, and corporate equities into and out of the U.S.
Taking into account both foreign and U.S. securities transactions, net foreign purchases of long-term securities were -$17.8 billion. This is down from net purchases of $25.7 billion in January, and widely unexpected. Analysts surveyed by Bloomberg expected net buying of $40 billion for February. Overall, it seems like investors looked for shelter outside of the U.S. in the first few months of the year, which were politically turbulent… (Read more.)
2) Home Builder Confidence Sinks to Lowest Level Since October: Despite the recent rebound in the real estate market, a gauge of confidence among home builders declined in April for the third consecutive month.
Higher costs for building materials and rising concerns about the supply of developed lots and labor sent the National Association of Home Builders/Wells Fargo index of builder confidence down 2 points to 42, the lowest level since October. Economists projected a slight increase to 45, according to the median estimate in a Bloomberg survey. A reading below 50 on the index means more respondents said conditions were poor than good… (Read more.)
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.