Markets turn with the Fed Minutes

Staff
13 Apr, 2005
New York City

This morning Commerce department reported that Feb goods and service trade deficit was $61.04 billion, 4.3% higher than January 2005 deficit. To put this in perspective, Feb 2004 and 2003 deficits were $45 and $40 billion. Surging oil prices and exports from all major trading countries played a role in driving the deficit higher.

Trade deficit hits $61 B, oil trades below $52, Fed wants measured rate hike

This morning Commerce department reported that Feb goods and service trade deficit was $61.04 billion, 4.3% higher than January 2005 deficit. To put this in perspective, Feb 2004 and 2003 deficits were $45 and $40 billion. Surging oil prices and exports from all major trading countries played a role in driving the deficit higher.

In February U.S. ran deficit with following major trading nations.
Brazil – $640 million
Canada - $5.77 billion
China - $13.87 billion
Germany - $3.6 billion
France - $668 million
India - $766 million
Japan - $6.8 billion
S. Korea - $1.187 billion
Malaysia - $1.33 billion
Russia - $889 million
Taiwan - $1.03 billion
UK - $1.8 billion

In February U.S. ran trade surplus with following nations.
Australia - $734 million
Hong Kong - $663 million
Panama - $150 million
Singapore - $446 million
UAE - $324 million

By region U.S. trade deficit was as follows.
OPEC $6.2 billion
European Union $8.4 billion
APEC $35 billion
20 Latin American countries $7 billion

In February and for the year 2005 U.S. did NOT register trade surplus with any region or trading block in the world.

Markets looked at these numbers and started selling off in the morning hours. Trade deficit of this level has stoked fears of inflation or dollar sell off. However, in the afternoon Fed released the minutes of the last meeting on March 22nd. Investors and trades took solace in the fact that while Fed is watching for the pick up in inflation but for now remains focused on measured increase in interest rate.

S&P 0.58%
Nasdaq 0.66%
Dow 0.63%

In Other News

Asian, European and South American markets trade lower
Czech government sells 51% stake in local telecom to Spain’s Telefonica
Greenberg takes fifth
In NY gold lost $1.10 and silver lost 10 cents
Crude oil trades below $52


Earnings news

French hypermarket retailer show 3.9% increase in sales for Jan-March
Black & Decker raises the 1Q outlook from $1.05-$1.10 to $1.30-$1.35
Arrow requests 10-Q report filing deadline extension
Alliance Capital reports that it will miss the 1Q earnings guidance of 66 cents
Computer Associates reports that 4Q earnings will be 1-2 cents vs 7-8 cents of guidance
Gannett, largest newspaper company reports 1Q earnings of $1.05 on lower broadcast revenue vs. guidance of $1.06
Travelzoo reported 82% jump in profit but misses analysts revenue projection, stock lose 17%
AmeriTrade reports 2Q earnings of 17 cents compare to 19 cents for the quarter year earlier