Tuesday’s Mid-Day Movers: 3 Stories Driving Markets
U.S. stocks were a mixed bag on Tuesday afternoon. The Dow broke above 15,000 for the second time in a week, while the tech sector lagged. At 12:20 p.m.:
|DJIA: +0.33% to 15,018.60||S&P 500: +0.24% to 1,621.42||NASDAQ: -0.05% to 3,391.26|
|Gold: -$15.10 to $1,452.90 per ounce||Oil: -$0.57 to $95.59 per barrel||U.S. 10-Year: +0.024 to 1.784%|
Here are three stories affecting the markets on Tuesday afternoon:
1) Will Happy Consumers Make Retail Look Good? “Americans are in phase two of the economic recovery, however for many it just doesn’t feel that way,” noted Nielsen’s senior vice president of Global Consumer Insights, James Russo, in the firms most recent survey on global consumer sentiment.
While the numbers were strong — 42 percent of North American respondents said they planned to spend on discretionary items in the next 12 months — sentiment in Canada pushed the overall figure higher. Comparatively, Nielsen remained cautious regarding its outlook for consumers in the United States. The weekly retail sales data released by Redbook and the International Council of Shopping Centers and Goldman Sachs Tuesday showed some softness for the week of May 4… (Read more.)
2) Americans Have Never Loved the Economy More: Gallup’s U.S. Economic Confidence Index climbed to -8 for the week ended May 4, matching the five-year weekly high set in February. The index in April also tied the five-year monthly best, with confidence among upper-income Americans breaking out of negative territory for the first time in five years.
Broadly speaking, this change in perception can be the result of two things in varying proportions. In absolute terms, economic indicators released over the past few months paint a picture of a U.S. economy that is slowly recovering. This idea is supported by consistently positive housing-market data and is highlighted by the most recent jobs report. Other positive catalysts include business investment, low inflationary pressures, and short-term increases in consumer spending… (Read more.)
3) Is a European Banking Union Finally Becoming a Reality? France and Germany have squared off in the current debate between austerity and pro-growth policies in Europe, reflecting the general positions held by debtors and creditors, respectively. Those loaning money to struggling economies want to minimize their exposure and ensure that spending is under control. Those facing recession want to reverse a trend of increasing unemployment and contracting economic output.
At issue now is the idea of a European banking union. Such an entity would exist under the umbrella of the ECB and would create a Europe-wide supervisor that could, ostensibly, salvage struggling banks and serve as a sort of first responder to crises. To date, Germany has resisted this idea because there is little to no legal foundation within the current Eurosystem to support it. Without careful consideration, the country could find itself harmfully exposed to Europe’s weak financial system… (Read more.)