The Markets
Last week, the term 'Easy Money' conjured both comedian Rodney Dangerfield and the U.S. Federal Reserve, and no one was certain how much respect either one should get.
The Fed accidentally e-mailed its market-moving Federal Open Market Committee (FOMC) meeting minutes to congressional staffers and trade lobbyists on Tuesday at 2 p.m. The minutes weren't supposed to be released to anyone until Wednesday at two. Once the mistake was realized, the Fed released the minutes early on Wednesday morning.
Markets enthusiastically embraced the minutes which appeared to focus on the idea quantitative easing will continue. The Dow Jones Industrial Average closed at a record high more than once last week, and the Standard & Poor's 500 Index is already nearing analyst's targets for the full year.
The minutes indicated committee members were less clear on the issue, according to the Washington Post, which reported:
"A few Fed officials think QE (Quantitative Easing) should be stopped immediately; a few think it should be shrunk fairly soon; many think it should be slowed if we see a rebounding job market; a few think it should continue at its current size until the end of the year; and a couple think it may need to be increased. The minutes also make clear Fed officials are not all on the same page in determining the economic climate that would trigger that tapering."
Committee members are not the only ones who don't know what to think about the economy. Consumer sentiment has been volatile. According to The Wall Street Journal, the Thomson-Reuters/University of Michigan consumer sentiment index showed consumer sentiment improved significantly from mid- to late-March only to decline again from late-March to mid-April. Bloomberg.com speculated weaker consumer sentiment may have been the result of the payroll tax rollback and weaker U.S. economic data.
Data as of 4/12/13
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500 (Domestic Stocks)
|
2.3%
|
11.4%
|
14.5%
|
9.9%
|
3.7%
|
6.0%
|
10-year Treasury Note (Yield Only)
|
1.7
|
N/A
|
2.0
|
3.9
|
3.5
|
4.0
|
Gold (per ounce)
|
-2.1
|
-9.3
|
-8.0
|
9.8
|
10.6
|
16.8
|
DJ-UBS Commodity Index
|
-0.2
|
-3.8
|
-5.3
|
-0.2
|
-8.7
|
1.8
|
DJ Equity All REIT TR Index
|
2.6
|
12.8
|
24.1
|
17.6
|
7.7
|
12.7
|
Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
|