Daily Data Flow: Bernanke Boosts Stocks; Sequester Meeting Scheduled for after Deadline; January Home Sales Strong »
Stocks Rise Thanks to Bernanke, Economic Data (Reuters)
Today, stocks rose one percent, as data showing strong January business spending and new home contracts proved encouraging to investors. Also contributing to the boost was Federal Reserve Chairman Ben Bernanke’s reiteration of his support for the Fed’s stimulus policy. “The Fed continues to encourage risk-taking in markets, which is a powerful tool that makes the danger not being long stocks, not in being too long,” said Tom Mangan, a money manager at James Investment Research Inc in Xenia, Ohio.
Congressional Leaders will Meet with President Obama, but not before Sequester (Bloomberg)
Preisdent Obama will meet with the majority and minority leaders from both the House and Senate, Republicans John Boehner and Mitch McConnell and Democrats Harry Reid and Nancy Pelosi, on Friday as the sequester cuts begin to occur. This signals that efforts will not be made to stop the cuts before they start, and Democrats reportedly expect the public to blame Republicans. “One thing Americans simply will not accept is another tax increase to replace spending reductions we already agreed to,” McConnell said in an e-mailed statement. He said the meeting “is an opportunity for us to visit with the president about how we can all keep our commitment to reduce Washington spending.” The effects the sequester will have on the economy have yet to be seen, but it appears they likely will be seen.
Rough Winter Didn’t Stop Pending Home Sales (CNBC)
As mentioned in the first item above, January had especially strong home sales, with the 4.5 percent rise over December beating the expected 1.8 percent gain. “Over the near term, rising contract activity means higher home sales, but total sales for the year are expected to rise less than in 2012, while home prices are projected to rise more strongly because of inventory shortages,” wrote Lawrence Yun, chief economist for the National Association of Realtors.