Market commentary

The market had several economic data releases this morning, most of which indicate an economy beginning to reflect some growth, but at a tepid pace. The weekly initial jobless claims came in right on top of estimates at 420,000. Claims are showing signs of stability in the new range of 410 to 440, having come in within the range for seven consecutive weeks.

Durable goods orders dropped 1.3% in November, a larger drop than expected, however, ex-transportation, orders rose a healthy 2.4%. The main reason for the overall decline was the drop in aircraft orders as nondefense aircraft orders were down 53.1% for the month.

Moving on to consumers, personal income rose 0.3% in November while October’s report was revised down to 0.4%. However, with personal spending coming in at a 0.4% growth rate, the pace of spending has increased more than income, causing the savings rate to fall to 5.3%.

Finally, the Thomson Reuters/University of Michigan index of consumer sentiment rose to 74.5 from 71.6 in November, a move in the right direction. Keep in mind this index averaged 89 in the five years leading up to the recession that began December 2007.

One other topic that has not been in the headlines is the steadily increasing price of oil; trading at over $90/bbl this morning. Those of you in southern California, where I reside, have been paying north of $3/ gal for gasoline for the past few weeks. So, with that in mind, Six Gulf Arab nations voted Wednesday to pursue the creation of a regional central bank and single currency with Saudi Arabia, Kuwait, Qatar, and Bahrain. Now, at what point do U.S. citizens realize it is in their best interest to use U.S. oil versus sending billion of dollars a month to the above mentioned folks? Of course one cannot blame these folks for wanting their own currency bloc given the U.S. and European strategy of debasing the dollar and the euro.

Remember, the bond market closes early today, but the HSOA lock desk will be open normal hours, until 4:00 PM, PT.