US debt is over 14 Trillion, and counting..What’s next?
Standard & Poor's on Monday downgraded it’s outlook for the United States, citing a "material risk" that policymakers may not reach agreement on its large budget deficit. The US debt is over 14 Trillion (and counting) http://www.usdebtclock.org/
While S&P maintained the country's top AAA credit rating, it said that authorities have not made clear how they will tackle long-term fiscal pressures.
S&P said the move signals there's at least a one-in-three chance that it could cut its long-term rating on the United States within two years.
In spite of a rocky start to earnings season, promising economic news helped reassure investors this week. Stocks even managed to post modest gains on Friday in response to the hopeful signs.
Aside from food and gas prices, the Labor Department reported that consumer prices rose just 0.1% in March, lower than the predicted 0.2%. With prices inflating slower than expected, Americans got a break. And in today’s economy, consumers need every break they can get. When prices are lower, people tend to feel better and spend more – good news since consumer spending accounts for about 70% of the total U.S. economy.
Signs show that Americans are also feeling more optimistic. The U.S. consumer sentiment index rose from 67.5 in March to 69.6 in April, beating expectations. This increase could be partially attributed to the addition of jobs for six straight months and an unemployment rate sitting at a two-year low. These positive numbers indicate job gains are helping Americans manage rising fuel costs and maintain a positive outlook.
Industrial production increased for the ninth straight month in a row, rising 0.8% in March, and factory production increased 9.1% in the first quarter. Total industrial production was 5.9% above its year-earlier level. These numbers are all higher than forecast last month, and are a good sign that factories will keep driving the U.S. economy.
These indicators show that prices are down, optimism is up, and factories are producing at higher levels than last year; all signs that our economy is still making progress. Earnings season will kick into high gear this week as Wall Street gets quarterly results from 110 members of the S&P 500, giving us a broad view of how Corporate America is doing.
ECONOMIC CALENDAR: Monday – Housing Market Index Tuesday – Housing Starts, Redbook Wednesday – Existing Home Sales, EIA Petroleum Status Report
Thursday – Jobless Claims, Philadelphia Fed Survey, Leading Indicators Friday – U.S. Market Holiday: Good Friday Observed
HEADLINES:
Congress sent President Barack Obama legislation cutting a record $38 billion from federal spending on Thursday. This measure will finance the government through the September 30th end of the budget year.
Bank of America's first-quarter income fell 39% on higher costs related to its mortgage business and litigation. The bank also settled a claim over faulty mortgage investments and set aside less money to cover bad loans. The earnings fell short of the 28 cents a share estimated by analysts surveyed by FactSet and revenue fell to $26.9 billion from $32 billion in the same period last year.
The first settlement with the Securities and Exchange Commission (SEC) could be reached as soon as next week. The securities regulator is in talks with major Wall Street banks to settle fraud allegations relating to the sale of toxic mortgage bonds to various investors that helped unleash the financial crisis.
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