The Economic Week In Review

• Consumer Credit-slowed substantially in February, $5.1B v.$10.3 in January.

• Pending Homes Index-outlook for the housing sector worsened as existing home sales fell 1.9% in February. Given the slowdown in the job market I would say this number will continue to look grim in areas where job losses are the heaviest.
• FOMC Meeting Minutes- Most downbeat in a while as the Fed said that fighting a recession is it’s number 1 priority but fighting inflation is just as important. Economic growth forecasts were lowered, but the Fed sees a recovery in the second half of 2008. I’m not holding my breath on this forecast as they have been trailing what’s really happening by a good margin!

• International Trade -This figure worsened which is indicating that the first quarter was weaker than the forecasts. The area this points to is a weakening in the manufacturing sector.
• Chain Store Sales-another dismal month for the retailers, not surprising considering the challenges families are facing.
• Jobless Claims -Claims were less than expected which was good for stocks.

• Import/Export Prices-Surged 2.8%, not surprising considering the weakness in the dollar. What this basically says is that we’re paying more for foreign goods.
• Consumer Sentiment-Consumer sentiment tanked as inflation continues to plague the average consumer.

• Bonds…2 year 1.74%, 5 yr. 2.50% and the 10 yr. 3.50%.
• Crude oil finished at $110.14 per barrel.

Wow, the GE announcement certainly shattered what would have otherwise been considered a calm week of sideways trading. Ge is considered a bellwhether stock and a shortfall announcement will be seen as a possible precursor to future bad news from other financial companies. The Dow finished the day down 257 points(2%) to close at 12325. The S&P 500 index also declined 2% to 1333 and the Nasdaq fell 2.6% to 2290. GE announced that 1Q earnings fell 8%, to 44 cents per share missing the consensus of 51 cents per share. This is significant in that their revenues increased by 8% in the same period. Most of the havoc was caused by the financial business although they also noted that their industrial and healthcare divisions took a hit.

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