Orders for big-ticket items up
Perhaps it was the Obama press conference March 24, in which he revealed that the Federal Reserve may begin buying Treasury securities. But whatever the case, Greg Morcroft of the Wall Street Journal reports that U.S. financial stocks have, for the time being, regained positive footing. This comes in no small part on an increase in orders for durable goods, payday loan funded or not.
The Financial Select Sector SPDR, which tracks financials in the S&P 500, climbed 5.4 percent. Demand for machines and capital goods was up in February, which in turn drove durable goods orders up by 3.4 percent according to the Commerce Department. This uptick in orders for big-ticket items is definitely a positive sign for America’s economy and marks the first monthly increase after six straight months of tumbling numbers.
Have we hit the bottom? This way up!
And economists had expected orders for durable goods to fall 1.2 percent. Ha!
Some of the high risers, thanks to this increase in orders, include the commercial real estate firm CB Richard Ellis Group Inc., which rose 60 percent to $4.81 per share; Bank of America Corp., which went up 10 percent; Fifth Third Bancorp (not responsible for the Fifth Third Burger), whose shares rose 13 percent; and XL Capital Ltd., where shares increased by 10 percent.
Even Goldman Sachs is up
Their shares experienced a more modest increase: up .6 percent to $111.28 per share.
Industrial & Commercial Bank of China (ICBC) has stated that Goldman Sachs is in a lock-up agreement where it will not sell 80 percent of its stock in ICBC before April 10, 2010. This helps keeps share prices stable. The remaining 20 percent Goldman can sell has been proposed in sale so that they can begin to repay the U.S. government for its bailout assistance.
Nice and stable in lock-up agreement
Once American Express Co. ends it’s own lock-up with ICBC, its share price will go up. As it is, the speculation has already increased their price by 1.3 percent, to $14.08 per share.
According to AMEX’s agreement with ICBC, two equal installments will occur on April 28 and October 20 (after the lock-up ends). American Express will consider “all potential methods of sale that would maximize value and minimize market impact, with a preference for a private sale to investors,” Morcroft relates.
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Well, this is a positive sign. It appears that the economy isn’t, after all, above good old fashioned economics – simple supply and demand for real goods and services. Turns out the best commerce usually has to do with – guess what? – actual customers wanting what you sell instead of just investing in market derivatives to bolster the balance sheet. I wonder if Wall Street knows anything about that sort of thing.