Bumped Up Market

Federal Reserve Chairman Ben Bernanke on Wednesday said U.S. monetary policy is "more or less in the right place" even though the central bank would not hesitate to launch another round of bond purchases if the economy were to weaken. In a statement after a two-day meeting, the Fed's policy-setting panel reiterated its expectation that interest rates would not rise until late 2014 at the earliest, and it took no action on monetary policy. The Fed also adjusted its economic forecasts to acknowledge both a labor market that is improving and stronger than expected growth this year. At the same time, officials anticipate that tax hikes and spending cuts could slow growth in 2013 and 2014. "We remain entirely prepared to take additional balance sheet actions as necessary to achieve our ...

U.S. Review Look Past the Monthly Volatility and See the Trend This week of economic releases painted a somewhat mixed picture, but the underlying trend still reflects an economy that is growing at a modest pace. The milder-than-usual winter likely brought some activity forward and below-consensus readings are due in part to payback. Housing starts, existing home sales and industrial production all posted disappointing readings in March that are likely not indicative of the underlying trend. Headline retail sales, however, came in more than double the consensus estimate in March, ending the first quarter on a positive note. Early Spring Brings Payback Period The full week of economic releases painted a somewhat mixed picture, but the underlying trend still reflects an economy ...

A little more than a year ago, a very successful professional investor declared, “If you don’t own a home, buy one. If you own one home, buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home.” Since that declaration, house prices have continued drifting lower in most parts of the country. The Case-Shiller index of national home prices is down about 4% year over year. Even so, we’re betting this professional investor was merely early…not wrong. US housing isn’t just cheap; it is the cheapest it has been in more than 40 years. And when one considers the possibility that inflation may rear its head soon, housing looks even cheaper still. If you think we’re crazy, you’re not alone. The housing market is a complete bust right now. The following ...

The dollar slid against the euro and the Swiss franc Monday after remarks by Federal Reserve Chairman Ben Bernanke spurred views that the bank could yet flood the market in another round of quantitative easing. The euro hit a better than three-week high against the greenback as the dollar slid to a similar low against the Swiss franc shortly after Bernanke said that the U.S. economy needs to grow faster to bring down the unemployment rate more. "At the very least this leaves that door cracked open to QE, but it definitely reaffirms the idea that the Fed is going to keep its foot on the gas pedal, at least in the foreseeable future," said Stewart Hall, a senior currency strategist with RBC Capital Markets in Toronto. Investors had seen lower chances for more easing from the Fed in recent ...

(Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday warned Congress that putting off a decision on the fate of expiring Bush administration tax cuts could unsettle businesses and households, undercutting the U.S. economic recovery. With presidential and congressional elections looming in November, many analysts think Congress is unlikely to act until the final months of the year. The tax cuts expire on January 1. Bernanke told the Senate Budget Committee that lawmakers might not have the luxury of waiting. "I don't know exactly when the uncertainty would become a factor, but surely as we get closer to January 1 and Congress has not given a clear road map for how it plans to proceed, that would certainly affect planning, business decisions, household decisions, as they look ...

Stocks rose on Wednesday on optimism the International Monetary Fund would be able to raise additional funds to help combat Europe's debt crisis and after Goldman Sachs' earnings beat estimates. The International Monetary Fund is estimating it needs to raise up to $600 billion to lend to countries struggling with the fallout from the growing euro zone debt crisis, IMF sources said. Greece and its creditors were to resume negotiations on all terms of a planned debt swap, hoping to overcome an impasse in talks and stave off a painful default. "Overall the European situation has shown remarkable stability so far this year in light of the downgrades and now the story percolating around Greece," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. ...

Lately, the credit rating agencies haven’t been doing much for International Living’s home country of Ireland, other than downgrading it. Moody’s cut Ireland’s credit rating to junk in recent weeks. But some countries are faring much better. In July, Standard & Poor’s bumped Uruguay’s credit rating up to “investment grade.” Moody’s and Fitch, the other major ratings agencies, boosted Uruguay’s rating as well, although not quite to investment grade. All three agencies like the country’s “prudent and consistent economic policies.” Fitch, which bumped Uruguay one notch to BB+ on July 14, said that Uruguay’s high GDP per capita income, strong social indicators and solid institutional framework underpinned the country’s creditworthiness. Of course, it helps that Uruguay’s economy is growing ...

Investors are entering the fourth quarter with a slightly raised exposure to shares and holding high reserves of cash that could quickly be used to fuel a stock rally, Reuters polls showed on Thursday. Surveys of 59 leading investment houses in the United States, mainland Europe, Britain and Japan showed an average of 50.5 percent of a balanced portfolio was held in equities in September, up from 49.2 percent in August. The shift was mainly the result of a move away from bonds -- down to 34.6 percent from 36.1 percent. But investors also showed their concern about the state of global finance by pumping money into safe-haven cash. Cash allocations were at 6.3 percent, the highest since the polls were first conducted in their current form at the start of 2009. High levels of cash have in ...

Core producer prices rose at their fastest pace in six months in July, pushed up by higher tobacco and light truck costs, but weak domestic demand was seen keeping inflation under control. The Labor Department said on Wednesday its seasonally adjusted index for prices paid at the farm and factory gate, excluding food and energy, rose 0.4 percent -- the largest increase since January -- after rising 0.3 percent in June. That compared with economists' expectations for a 0.2 percent rise. Overall prices received by producers rose 0.2 percent, above economists' expectations for a 0.1 percent gain, after falling 0.4 percent in June. "Nobody is going to get too excited about inflation risks at this point," said Avery Shenfeld, chief economist at CIBC World Markets in Toronto. U.S. financial ...