Thursday Afternoon Cheat Sheet: 3 Stories That Moved Markets

Fueled by gloomy economic data from around the world, the U.S. equity markets started Thursday off on the wrong foot. However, positive sentiment returned by the end of the day, sparked by strong business activity, and the markets closed on a relatively flat note.

At the close: DJIA: -0.07%, S&P 500: +0.07%, NASDAQ: +0.06%.

1) About $1.2 trillion in spending cuts over the next 9 years — $85 billion this year alone — will come knocking on America’s door on March 1. Congress has just over two weeks to reach a solution to the sequester, which President Barack Obama called “sudden, harsh, arbitrary,” and “a really bad idea” in his State of the Union address on Tuesday.

Senate Democrats have put together a $110-billion proposal, a mix of spending cuts and revenue increases, that would delay the sequester for 10 months. Half of the cuts would come from defense spending. Additional revenue would be raised through the controversial Buffett Rule, which would impose a minimum 30 percent tax rate on incomes above $1 million… (Read more.)

umicore__silver_gold_bars19719394s72) Both gold and silver experienced weakness on Thursday as the U.S. dollar climbed higher, continuing a trend of consolidation that began in 2012. The price action may be causing some investors to believe that the market is falling out of love with precious metals, but central banks around the world continue to gobble up massive amounts of the commodities.

According to the World Gold Council, central banks purchased 145 tonnes of gold in the fourth quarter of 2012, the highest amount in any quarter since the sector became net buyers in 2009. Gold buying by central banks rose 17 percent for the full year… (Read more.)

3) The most-recent AAII survey shows that more and more investors are feeling increasingly cautious, taking a neutral position on the markets. While most investors in the survey reported bullish sentiment, both bullish and bearish sentiment fell in favor of neutral sentiment. Bullish sentiment has fallen by 10 percentage points over the past few weeks as concerns that the markets are overbought have risen.

However, if investors in the survey agreed on one thing, it’s that bi-partisan bickering over the sequestration remains a tremendous economic threat… (Read more.)

Don’t Miss: Spending Cuts and Politicians: Same Story, Different Chapter.