July 14, 2009
July 14, 2009 by admin
The stock market finished the day in positive territory following a day filled with corporate earnings reports, an update on the June retail sales and PPI numbers. Investors traded the market in a fairly tight range for the entire day and finished about thirty points higher. The major economic reports of the day were a major boost towards improving confidence that the economy is slowly bouncing back to life.
The month of June saw retail sales edge higher by .6%, a strong improvement from the previous month. The producer price index was up by .5%, and moved to its highest level in the last two years. These two key economic reports provided a strong base for investors who were looking for some macro economic data to boost confidence that while the economy is likely to struggle, the worst is likely over.
Goldman Sachs, one of the world’s largest investment banks drew much of the attention as the headline company that released their corporate earnings today. The investment bank posted spectacular quarterly earnings for the second quarter, beating estimates on revenues and earnings handily for the month. Earlier this year, Goldman Sachs was one of the first companies to pay back monies borrowed through the TARP program, providing further evidence that the companies balance sheet was healthy and the company was positioning itself to return to profitability. Goldman Sachs has been one of the lightening rods for those who have tracked the money flow of taxpayers through AIG. The company benefited by the government bailout of AIG to the tune of almost thirteen billion dollars last year, money that was provided by tax payers and paid out from AIG to Goldman Sachs. Intel, one of the world’s largest technology companies, followed up on the positive earnings reports by beating expectations, this news could position the market for another day of positive trading.
The moderate improvement in the stock market has helped to push long term mortgage rates slightly higher. The yield on the ten year treasury bond has moved back above the 3.4% level and finished at 3.36% on Tuesday. The improvement with bonds can be traced directly to the stock market rally to stay in the 8000 point range. The upward push on bonds, has lifted fixed rate mortgage loans to 5.25% nationally with most banks and mortgage lenders on thirty year loan terms. Long term mortgage rates have been moving in a range from 5.25 to 5.5% for the last thirty days and are likely to stay in this range without a major change to the outlook of the economy.