Continuing my call-me-naïve series on hope and optimism for our economy, here are the latest “optimalistic” economic and financial indicators. (For a definition of “Optimalist,” please click here.)
Let’s call these indicators “glimmers of hope.”
WARNING:
For professional and reliable economic and financial information and advice—albeit probably very depressing—please consult the real experts, here or elsewhere.
For rumors on how our economy is failing, going to hell in a hand basket, please listen to Rush Limbaugh.
First, how about that great market close just before the long Easter weekend!
Let’s recap:
Thursday, stocks closed higher for a fifth straight week in a row. The Dow Jones surged 246 points, or 3.1%, to 8083, a gain of 22% over the last five weeks—its best five-week run since July 1938.
In addition to the surge in the Dow Jones, the broader Standard & Poor’s 500-stock index rose nearly 4 percent, having now risen more than 26 percent since stocks bottomed out on March 9, one of its best runs since the Great Depression.
Also, last week a Gallup Poll reported that over two-thirds of Americans — 71% — have a great deal or a fair amount of confidence in President Obama to do or recommend the right thing for the economy. Now that is hope translated into real confidence.
On Tuesday, we heard both the President and the Federal Reserve chairman voice cautious optimism that our economy may be beginning to stabilize and that the administration’s efforts “are starting to generate signs of economic progress.” They point out that some lending markets are recovering along with other sunny signs.
Some of these signs, according to Bernanke: “…recently we have seen tentative signs that the sharp decline in economic activity may be slowing…A leveling out of economic activity is the first step toward recovery.”
The Washington Post noted Diane Swonk’s (chief economist of Mesirow Financial) comments: “A few months ago, the economy was in its deepest, darkest hours. It’s not dawn, yet, but it’s better than it was.”
Today, according to Bloomberg.com:
Claims for U.S. unemployment insurance unexpectedly dropped last week and single-family housing starts stabilized in March, providing more evidence the economic slump is easing.
Initial jobless claims decreased by 53,000 to 610,000 in the week ended April 11, the fewest since January, the Labor Department said today in Washington. Builders broke ground on 358,000 single-family homes at an annual rate, unchanged from the prior month.
“We are beginning to move away from the state of panic and that’s what these reports are showing us,” said John Herrmann, chief economist at Herrmann Forecasting in Summit, New Jersey.
And, James O’Sullivan, senior economist at UBS Securities LLC in Stamford, Connecticut, said:
There’s a real possibility this could be a turning point…We’ve seen some fading of weakness in consumer spending. The logical next step would be some fading of weakness in the labor market.
And, still according to Bloomberg.com: (They call it “Less Pessimism”):
In another sign the housing slump may be nearing a bottom, the National Association of Home Builders/Wells Fargo’s confidence index rose this month to the highest level since October, the group said yesterday. Record-low mortgage rates and falling prices started to stir demand.
Sales of both new and existing home rose in February and regional reports suggest the gains may continue. Southern California house and condominium sales climbed 52 percent in March from a year earlier as buyers took advantage of plunging prices, MDA DataQuick, a San Diego-based research company, said yesterday.
Today U.S. stocks advanced for a second day led by Hewlett-Packard and technology, and, as the financial sector erased earlier losses, also led by Regions Financial Corp. Finally, on expectations of reassuring quarterly results from companies such as Google (Google’s 1st Quarter’s EPS/revenues exceeded expectations), Harley-Davidson, IBM, etc. Also, J. P. Morgan’s better-than-expected profit added to, yes, that magical word, “optimism.”
The market also saw a rarity these days, the very successful IPO of software company Rosetta Stone Inc. It was the second IPO this week, raising hopes that the IPO market—dead in the water since last year— may be reviving.
Today, the Dow industrials closed up almost 96 points (+1.19%) topping 8,100 at 8,125.43—its highest close since early February. The Nasdaq composite up almost 44 points (+2.68%) at 1,670.44. S&P 500 up 13.24 points (+1.55%) at 865.30
European stocks also advanced buoyed by U.S. economic and financial news. Credit Suisse Group AG and Deutsche Bank AG gained more than 6 percent.
Nokia, the world’s biggest maker of mobile phones, jumped to a three-month high.
According to Bloomberg.com:
“There is a little bit of hope out there,” said David Buik, a London-based market analyst at BGC Partners. “The market is on a slightly better footing and there is now starting to be a general feeling that we may have hit the bottom.”
National benchmark indexes rose in all of the 18 western European markets except Iceland. Germany’s DAX gained 1.3 percent, while France’s CAC 40 added 1.8 percent and the U.K.’s FTSE 100 rallied 2.1 percent.
“A little bit of hope,” that’s all we ask for.
That will keep the glass half full.
