Friday Afternoon Cheat Sheet: 3 Stories That Moved Markets
The markets snapped a historic rally on Friday, propelled lower by an unexpectedly poor consumer confidence report.
At the close: DJIA: -0.17%, S&P 500: -0.16%, NASDAQ: -0.30%.
1) The Federal Reserve sent a record $88.4 billion in profit to the Treasury in 2012, according to data released on Friday. The vast majority of the remittances — 91 percent — came from interest on Treasury bonds and mortgage-backed securities. The news is good — the Federal Reserve has never missed an annual payment — but clouds loom on the horizon. Central bank researchers have issued warnings, suggesting that the Fed could miss payments in the coming years as a result of the increasingly precarious position the central bank has found itself in. Under adverse scenarios, losses could reach as high as $125 billion in 2019.
On that note, reports suggest that the Fed is on track to continue purchasing assets at a rate of $85 billion per month, growing its near $3 trillion balance sheet. Recent economic indicators such as retail sales, manufacturing and industrial output, and unemployment figures have been showing improvement. In the absence of major negative catalysts, it looks like the Fed will stay the course.