Tuesday Afternoon Cheat Sheet: 3 Stories That Moved Markets
After a slow morning, the U.S. equity markets struck out for gains around noontime and closed the day in positive territory. At the close:
|DJIA: +0.41% to 14,673.50||S&P 500: +0.35% to 1,568.60||NASDAQ: +0.48% to 3,237.86|
|Gold: +$12.00 to $1,584.50 per ounce||WTI Crude: +0.74% to $94.05 per barrel||U.S. 10-Year: +0.003 points to 1.749%|
Here are three stories that helped move markets on Tuesday:
1) Although stocks continue to hang near all-time nominal highs, the recovery on Main Street is still lacking to say the least. Pessimism among small business owners declined last month and is now below the average since the recession technically ended in 2009.
The National Federation of Independent Business, the leading nonprofit small business association representing small and independent businesses, reported that its Small Business Optimism Index dropped 1.3 points in March to 89.5, compared to 90.8 in the previous month. March’s reading is only slightly above December’s level of 88.0, which was the second worst reading since March 2010. In the 44 months of economic expansion since the beginning of the “recovery” in July 2009, the index has averaged 90.7… (Read more.)
2) How Broke Is the United States? The data is pretty damning. Government figures show that while U.S. gross domestic product currently sits at nearly $15 trillion, national debt has nearly tripled since 2001 and currently sits at $16.8 trillion. Massive ongoing asset purchases by the Federal Reserve have left the central bank holding 16 percent of total outstanding Treasuries.
China is the biggest foreign holder of American debt at 11 percent. Japan takes the number-two spot with 10 percent. All said, according to Capital Economics Chief U.S. Economist Paul Ashworth, net external liabilities for the U.S. are about 30 percent of GDP. This is a lot of money to owe foreign governments… (Read more.)
3) How Much Gold Exists in the World? Gold is a very controversial asset. Many investors view the precious metal as a storage of wealth and a hedge against uncertainty, while others call it bubble. The price swings cause much of the confusion, but as it turns out, the supply side of gold is also debatable.
Warren Buffett, chief executive officer of Berkshire Hathaway, painted a colorful analogy of the gold supply last year. In a Forbes article, he says the world’s entire gold stock would fit comfortably within a baseball infield, if it was all melded together to form a cube. The latest annual survey conducted by Thomson Reuters GFMS agrees with Buffett. According to the organization, there is about 377 million pounds of gold above ground, or roughly 171,000 tonnes… (Read more.)