US Stock Market
Us stocks fluctuated having on one hand consumer companies leading the decline and raw material companies leading the incline, whereas investor’s found peace and comfort in the Fed’s FOMC minutes as it expected further improvement in overall economical activities thus overshadowing today’s pessimistic news about the labor sector which was provided by the ADP report showing further deterioration in deterioration in the sector throughout the month of August due to companies shedding more employees than expected.
The Dow Jones Industrial Average index shed 29.93 points or 0.32% to close at 9280.67 levels, The Standard & Poor’s 500 Index lost 3.28 points or 0.33% to close at 944.76 levels, The NASDAQ Composite Index declined 1.82 points or 0.09% to close at 1967.07 levels.
FOMC Meeting…
The participants and the Board of Governors that were present within the FOMC meeting that was held on August 11 and 12 discussed many major crucial points concerning the US current economic conjuncture, pointing out present strengths, developments and weaknesses.
On one hand, recent developments in the domestic and foreign financial markets were witnessed and conferred and the Federal Reserve's total assets were nearly unchanged so far to remain around the amount of $2 trillion since the purchase of securities were balanced by a further drop of the exploit of liquidity facilities and system's credit.
Along with discussions once again concerning the virtues of embracing agency MBS backed by adjustable-rate mortgages (ARMs) in the Committee's MBS purchase plan as to try to diminish the large spreads between ARM rates and yields on treasury securities of a similar duration.
On the other hand, the meeting participants updated the ongoing development of different tools that could help the removal of policy accommodation with measures such as executing reverse repurchase agreements and looking forward on tightening the link between the interest rate paid on reserve balances of the Federal Reserve Banks and their federal funds rate.
Furthermore, the Board of Governors approved finally on extending the TALF program (Term Asset-Backed Securities Loan Facility) and expanding the final date for new TALF loans towards the year 2010.
As for the current labor market conjuncture, participants of the meeting believe undoubtedly that the unemployment rate remains high but declared that the pace of job losses had slowed down within the last months, considering this a good sign of a gradual recovery, beside the fact that an economic stability is clearly observed as proclaimed by the participants throughout all the sectors of the economy.
Pfizer Inc largest agreement…
Pfizer Inc, the huge and known worldwide drug-maker, agreed on paying the considerable amount of $2.3 billion to resolve a U.S investigation concerning an illegal selling and promotion of medicines, consisting of $1.3 billion given to seal the criminal part of the investigation, having in mind actually that this is so far the largest amount paid in such a case and that the medical corporation denied all of the civil allegations in the lawsuits except some related to the marketing of Zyvox.
EIA Report Worst than Forecasts…
The US released its EIA report showing that U.S. commercial crude oil inventories decreased by 0.4 million barrels from the previous week. At 343.4 million barrels, U.S. crude oil inventories are above the upper boundary of the average range for this time of year.
Whereas, the total motor gasoline inventories decreased by 3.0 million barrels last week, and are in the upper half of the average range. Both gasoline inventories and gasoline blending components decreased last week. Distillate fuel inventories increased by 1.2 million barrels, and are above the upper boundary of the average range for this time of year.
US Factory Orders Worse Than Forecasts…
US released its Factory Orders for July came in at 1.3%; worse than the forecasted reading of 2.2% but better than the prior revised reading of 0.9% from 0.4%.
US Nonfarm Productivity…
US released its second quarter final reading of its Nonfarm Productivity showing a incline as it came in at 6.6%; better than the forecasted reading of 6.4% and the advanced reading of 6.4% as well, whereas the second-quarter reading of the Unit Labor Costs plunged slightly and came in at -5.9%; which worse is than the forecasted and the advanced readings that are both at -5.8%.
US Nonfarm Productivity…
US released its second quarter final reading of its Nonfarm Productivity showing a incline as it came in at 6.6%; better than the forecasted reading of 6.4% and the advanced reading of 6.4% as well, whereas the second-quarter reading of the Unit Labor Costs plunged slightly and came in at -5.9%; which is worse than the forecasted and the advanced readings that are both at -5.8%.
The British Banking Association LIBOR
The British Banking Association released the LIBOR rate for today, starting with the dollar, the overnight rate rose from 0.229% to 0.230%, and the one week LIBOR fell from 0.251% to 0.248%, while the three months rate fell from 0.334% to 0.330%, and the twelve months LIBOR fell a little from 0.296% to 0.295%.
US MBA Mortgage Applications…
US released its MBA Mortgage Applications showing a decline as it came in at -2.2% from 7.5%.
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