Turning to the US, a snapshot of the week’s economic data is provided below.

May 8, 2009

April employment report - details point to positive developments

• STOCKS
• RELATED ARTICLES
• ALSO BY...

SEARCH:

Quote, Unquote: Biased Credit Rating Agencies?
Airlines: People Won't Fly, So We'll Raise Fees
Trading Radar: GDP Highlights a Thin Week
California Oversteps with HDTV Regulations
Goldman, Beaten But Unbowed

Velocity of US Money Supply Finally Edging Up
The Dollar Is Burying Non-US Investors
Bernanke Built It, But They Did Not Come
Is the Risk Trade Back On?
Contraction in Bank Credit Worse This Time Around

• Initial Jobless Claims - leading indicator!
• Productivity - gains in first quarter

May 6, 2009

Challenger Report and ISM Employment Index - more encouraging news about employment conditions

May 5, 2009

Bernanke mentions positive factors with caveats

May 4, 2009
 

• Senior Loan Officer Opinion Survey - credit conditions have improved
• Pending Home Sales Index posts second consecutive monthly advance
• Public Sector and Non-residential Construction Outlays lift overall construction spending.

Also, almost 21.8% of US homeowners owed more than their properties were worth as of March 31, Zillow.com said in a report (via Bloomberg). At the end of the fourth quarter, 17.6% of homeowners were underwater, while 14.3% had negative equity 3 months earlier.

In his testimony before the Joint Economic Committee in Washington on Tuesday, Fed Chairman Ben Bernanke noted that “the pace of contraction may be slowing ... some tentative signs that final demand, especially demand by households, may be stabilizing.” Although he expected the economic cycle to bottom out later in 2009, he also added that “a number of factors are likely to continue to weigh on consumer spending, among them  the weak labor market and the declines in equity and housing wealth that households have experienced over the past 2 years."

Jeremy Grantham is not assured of an enduring recovery and reasoned as follows:

“Although the economy is likely to kick up in the next 12 months (although far from a near certainty), I believe it is likely that the longer-term health of the economy will be exaggerated. In time -- perhaps a year into the recovery -- the economy will slow once again and stay disappointingly below the standards to which we have become accustomed over the last several decades.

“... what I’m proposing could be known as a VL recovery (or very long), in which the stimulus causes a fairly quick but superficial recovery, followed by a second decline, followed in turn by a long, drawn-out period of sub-normal growth as the basic underlying economic and financial problems are corrected.”

Week’s Economic Reports

Click here for the week’s economy in pictures, courtesy of Jake of EconomPic Data. Click here for a summary of this week's economic calendar from Yahoo.

In addition to a speech on the financial crisis by Fed Chairman Bernanke (Tuesday, May 12), the US economic highlights for the week include the following: Retail Sales (Wednesday, May 13), PPI (Thursday, May 14) and CPI, Industrial Production and Michigan Consumer Confidence (Friday, May 15).

Markets

The performance chart obtained from the Wall Street Journal Online shows how different global financial markets performed during the past week.

“The best investors are like socialites. They always know where the next party is going to be held. They arrive early and make sure that they depart well before the end, leaving the mob to swill the last tasteless dregs. Good money managers understand that. Investment is all about change and anticipating it,” said The Economist in 1986 (hat tip: Charles Kirk).

That’s the way it looks from Cape Town (where we're enjoying balmy autumn days).