All four economic data releases missed expectations today.
First, the scoreboard:
Dow Jones: 15,231.84, -43.85, (-0.29%) S&P 500: 1,650.42, -8.36, (-0.50%) Nasdaq: 3,465.24, -6.38, (-0.18%)And now, the top stories:
- Three big economic data releases came out at 8:30 AM, and all three fell short of economists’ expectations. Initial jobless claims surged to 360,000 (330,000 expected), consumer prices fell 0.4% month-over-month (-0.3% expected), and housing starts fell 16.5% month-over-month (-6.4% expected).
- The releases caused stocks to fall as investors moved into bonds (which have themselves been selling off over the past week), but stock market losses turned to gains after the opening bell rang at 9:30 AM.
- The rally at the bell proved to be short-lived, as ominous signs from the Philadelphia Fed’s monthly Business Outlook Survey caused another sell-off in the stock market at 10 AM. The headline index from the Philly Fed report unexpectedly fell to -5.2 from 1.3, indicating moderately worsening business conditions in the region over the past month. Economists were actually looking for a rise in the index to 2.0.
- Yesterday, Tesla announced that it was raising more money and that CEO Elon Musk would be investing $100 million of his own money into the company. Today, shares of the electric car maker are up more than 8%. Tesla stock is on a massive tear after beating earnings expectations last week.
- Data released from the World Gold Council today revealed that global central banks purchased over 100 tons of gold in the first quarter of 2013. “The price drop in April, fuelled by non-physical moves in the market, proved to be the catalyst for a surge of buying that has left many retailers short of stock and refineries introducing waiting lists for deliveries,” said Marcus Grubb, managing director at World Gold Council, in a press release.
- This afternoon, Wall Street Journal Federal Reserve Reporter Jon Hilsenrath wrote a blog post examining the differences between the commonly quoted consumer price index and the Fed’s preferred measure of inflation, personal consumption expenditures. The takeaway: the Fed hasn’t begun to sound the alarm bells over low inflation just yet.
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