Daily Market Commentary for August 29, 2011
Estimated damages from Irene are expected to stand at $7 Billion.
(read more at Millennium-Traders.Com) http://www.millennium-traders.com/news/newscommentary.aspx
Trading volume remained light on Wall Street throughout the trading session, just another part of the aftermath of Hurricane Irene. With the closures of major transit lines into New York City after Irene, the results were fewer traders than usual on Wall Street. Into mid afternoon trading, Dow Jones Industrial Average was hosting a gain of over 240 points, NASDAQ was higher by over 75 points and S&P 500 was higher by over 30 points.
European Central Bank President Jean-Claude Trichet told a European Parliament committee that the institution expects annual inflation in the 17-nation euro zone to remain above 2% 'over the months ahead'. Trichet said the Governing Council 'is determined to ensure that inflation expectations continue to be firmly anchored' in line with the ECB's target of keeping inflation below but close to 2%. Trichet defended the ECB's decision to resume bond purchases through its Securities Market Program and said the actions remain separate from the ECB's monetary policy stance, emphasizing that liquidity provided by the bond purchases is reabsorbed through the bank's market operations.
Commerce Department reported personal incomes of Americans rose 0.3% in July, but spending climbed even faster at 0.8% as auto purchases surged, reducing the U.S. savings rate last month. The increase in spending was the largest in two years. Savings rate fell to 5.0% in July from 5.5% in the prior month. Disposal income adjusted for inflation fell 0.1%, marking the first decline in 10 months. Inflation rose 0.4% based on the latest reading from the personal consumption expenditure price index. The core PCE, which excludes volatile food and energy costs, rose a lesser 0.2%.
National Association of Realtors reported index of pending home sales fell 1.3% in July. The index is nonetheless 14.4% above July 2010 levels. A sale is listed as pending when the contract has been signed but the transaction has not closed. High levels of cancellations meant gains in the pending-home-sales series in May and June didn't translate to the final sales as measured in the existing-home-sales series. Lawrence Yun, chief economist for NAR said contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April.
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