Decreased Oil and Gas Imports Keep Trade Deficit in Line
Additional oil and gas production and shipments explain why the trade deficit has held steady or even improved amid the recovery.
With a thin economic news flow and earnings season coming to an end, the market basically treaded water for the week, with small caps continuing to be the one weak spot. The S&P 500, European indexes, and even emerging markets were virtually unchanged on the week. Bond rates were slightly lower at 2.62% on the 10-year U.S. Treasury bond versus the 2.7% range last week. My colleague David Sekera, Morningstar's director of corporate bond strategy, says that it's been quite awhile since rates have remained in such a small range for this long.
The trade report was the only one of consequence this week, and it was little changed and in line with expectations. Home price growth slowed, but not as much as I would have suspected. Weekly and monthly chain store data finally appeared to have made an important turn as better weather and better employment data have led to more spending. Federal budget data indicated that the federal budget deficit continued to decline. Surprisingly, tax collection did not do as well as employment data, suggesting that one of the two series is likely to be restated at some point.
Robert Johnson, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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