The equity markets improved slightly as low volume due to a holiday shortened week. The S&P 500 Index increased less than a point, while the volatility in the Euro continued. The gasoline market continued to press higher after retracing since mid March. The S&P 500 made a new 52 week high close at 1173.
In the U.S., home prices were unchanged on a year over year basis according to the S&P Case-Shiller home-price indexes. Prices in 10 major metropolitan areas were flat in January from a year earlier, while the index for 20 major metropolitan areas dropped 0.7% year over year. Compared with December, adjusted for seasonal factors, the 10-city index rose 0.4% for January, while the 20-city composite climbed 0.3%. Housing prices are now at the point where they are bottoming and are likely not to continue their downward trajectory.
U.S. consumer confidence rebounded in March after dropping in February. The Conference Board, said its index of consumer confidence increased to 52.5 this month, from a revised 46.4 in February, first reported as 46.0. The March reading was better than the 51.0 expected by economists surveyed, but the index is below the 53.6 in December and 56.5 in January. The mixed report is a function of consumers concerns about the labor markets. The present situation index, a gauge of consumers’ assessment of current economic conditions, rose to 26.0 in March from a revised 21.7 in February, originally reported as 19.4. Consumer expectations for economic activity over the next six months increased to 70.2 from a revised 62.9, first put at 63.8.
Japanese data was rather disappointing after the robust retail sales reported on Monday. February industrial output fell nearly twice, what the market had expected. The 0.9% decline was the first drop in a year. Mitigating factors include the sharp 2.7% rise reported in January and the early lunar New Year. The unexpected 0.5% decline in overall household spending, is concerning for market participants. The consensus was for more than a 1% gains. Still, with unemployment holding at a 10-month low (4.9%) and the job-to-applicant ratio ticking up, the real take away story is that the Japanese economy is also enjoying a fragile recovery. The Tankan Survey (April 1 in Tokyo) is expected to underscore the message with a marked improvement.
In commodity news, OPEC in a meeting of member in Cancun Mexico is circulating a paper that states that oil prices will remain in a $70-$80 dollar range for the next 10 years due to demand factors.