Global Business Confidence:

Global business confidence is strong but has moderated in the past couple of weeks, likely because of the uncertainty created by the Japanese disaster and Middle East unrest. Consistent with this is the falloff in businesses' broad assessment of current conditions, particularly in Japan and, to a lesser degree, in the rest of Asia. Responses to more specific questions such as the strength of sales and investment intentions remain nearly as upbeat as they have ever been in the history of the survey. Expectations regarding the outlook also remain very positive. Pricing, which was under pressure at the end of last year, has firmed, with rising oil and commodity prices. The global economy is expanding at a rate that is well above its potential.

 

Risk of Recession: 19%
The probability that the U.S. will be in recession in six months fell from January's 21% to 19% for February. The probability of recession has fallen for six consecutive months and is below 20% for the first time since 2007. Though the data on industrial production, hiring, retail and housing sent mixed messages in February, the recovery remained intact. Initial claims have swung wildly but continue to trend lower while consumer sentiment and stock prices rose in February, which helped lower the probability of recession. The February probability of recession doesn't fully incorporate the late spike in gasoline prices, and the Japanese earthquake this month could push the risk of recession higher because of the tightening in financial markets.

 

State Personal Income:+ 0.9%
Personal income advanced broadly in the fourth quarter of 2010, with all states posting an increase from the third quarter. In addition, many states enjoyed a modest acceleration from the third quarter. On average, personal income grew 0.9% between the third and fourth quarters of last year, up from an average of 0.6% in the third. The inflation rate in the fourth quarter was also high, but nearly all states still experienced a real increase in income.

 

Durable Goods (Advance): -0.9%
New orders for durable manufactured goods fell 0.9% in February, going against expectations for a modest increase. Excluding transportation, new orders declined 0.6%. Shipments rose 0.3%, and inventories were up 0.9%. The details of the report were mixed; core capital orders fell 1.3%, while shipments rose 0.8%.

 

Jobless Claims: -5,000
Initial claims decreased by 5,000 to 382,000 for the week ending March 19; the prior week's data were revised from 385,000 to 387,000. This was in line with recent trends and is further indication that the labor market is moving in the right direction. Continuing claims are falling as well, dropping by 2,000 to 3.721 million for the week ending March 12. This count does not include the millions more on extended and emergency benefits, though their ranks are gradually thinning as well.

New-Home Sales (C25): -16.9%
The demand for home sales remains depressingly weak, with sales dropping at an unexpectedly sharp pace of 16.9% m/m. Part of the large m/m decline results from a 6% upward revision to January sales. Nonetheless, at 250,000 annualized units, sales of new homes have declined to a record low. New-home sales remain 28% below one year ago. Months of supply increased to 8.9, and the median new-house price declined 9% from one year ago.

MBA Mortgage Applications Survey: +2.7%
Mortgage applications rose modestly in the week ending March 18, 2011, driving all three application indices higher. The market index rose 2.7%, more than reversing the previous week's 0.7% fall. The purchase index gained 2.7% as well but still remains below its year-ago level. Meanwhile, the refinance index extended last week's gains as low mortgage interest rates incentivized homeowners. The contract rate on the 30-year fixed mortgage ticked up 1 basis point to 4.8% compared with the previous week.
 

Existing-Home Sales: 4.88 mil
Housing demand remains soft. Sales of existing homes dropped in February, and the 9.6% decline was larger than anticipated. The decline has wiped out half of the slight gains that home sales made in the previous few months, bringing the pace of sales back down to 4.88 million annualized units. Other signs that softness lingers in the housing market include a months of inventory that increased to 8.6 months and a 5.2% y/y decline in the median house price.

Natural Gas Storage Report: -6 bcf
Working gas in underground storage fell by 6 billion cubic feet during the week ending March 18, just short of expectations for an 8 bcf draw. This report will weigh on natural gas prices.
 

Oil and Gas Inventories: 03/18/2011
Crude oil inventories rose by 2.1 million barrels during the week ending March 18, ahead of the consensus expectation of a 1.5 million barrel rise. Distillate inventories were unchanged versus the consensus expectation of a 1.5 million barrel drop. Gasoline inventories fell by 5.3 million barrels, exceeding the consensus expectation of a 2 million barrel drop. Inventories rose by 200,000 barrels in Cushing OK, hovering near a record high. Refinery capacity utilization rose by more than expected, from 83.4% to 84.1%. Petroleum demand rose modestly. This report should not have a measurable effect on oil prices.

  

Source: Economy.com  

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