Gauge of business spending plans edges higher

WASHINGTON, Mon Jan 28, 2013 — A gauge of planned business spending rose in December, a sign that business worries over tighter fiscal policy may not have held back investment plans as much as feared at the end of 2012.

The Commerce Department said on Monday that non-defense capital goods orders excluding aircraft, a closely watched proxy for investment plans, edged higher 0.2 percent. The government also revised higher its estimate for November.

NY Fed manufacturing growth slowed in June

NEW YORK, Fri Jun 15, 2012 – A gauge of manufacturing in New York state fell sharply in June but still showed growth, the New York Federal Reserve said in a report on Friday.

The New York Fed’s “Empire State” general business conditions index fell to 2.3, a 15-point drop from the month before and the lowest level since November 2011, and far below economists’ expectations of 13.

Employment gauges also declined slightly, and indexes for the six-month outlook fell for the fifth consecutive month to 23.1, suggesting waning optimism about the medium-term.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

JPMorgan’s future losses at the mercy of an obscure index

NEW YORK, Thu May 17, 2012 – It’s the biggest parlor game on Wall Street: Estimating how large JPMorgan Chase & Co.’s trading loss will be from a hedging strategy that went wrong.

The biggest U.S. bank by assets has already disclosed $2 billion of paper losses, and CEO Jamie Dimon said it could lose another $1 billion or more.

The losses will grow, some traders say, because it appears JPMorgan has only sold a small portion of its position, leaving it vulnerable to price swings in a thinly traded market. Others are not so sure the bank will suffer much more than it already has. Dimon said the bank won’t rashly sell, and any additional losses could arise throughout the year. A JPMorgan spokeswoman declined comment.

The source of JPMorgan’s problems is an obscure group of indexes that track the performance of corporate bonds. One of the indexes, the Markit CDX NA IG Series 9 maturing in 2017, is essentially a portfolio of credit default swaps – basically contracts that protect against default by a borrower.

This particular index is tied to the credit quality of 121 North American investment-grade bond issuers, including such names as Kraft Foods and Wal-Mart Stores.

JPMorgan used that index, and others, to bet that credit markets would strengthen. Because that position is widely known on Wall Street, many traders are betting the opposite way in the hope of profiting as the bank’s losses increase. The index has been moving against JPMorgan in recent days.

Oppenheimer & Co. used the average of the index in 2011 – 141 – to estimate on a straight line basis a theoretical additional loss for the bank of $5.9 billion. Oppenheimer analysts, however, cautioned that such a large loss was unlikely. “We think the number will be less” than a $5 billion estimate, they said.

Home builder sentiment rises for third month: NAHB

NEW YORK ― Homebuilder sentiment perked up in December for the third month in a row, to its highest level in a year and a half, the National Association of Home Builders said on Monday.

The NAHB/Wells Fargo Housing Market index rose to 21 from a downwardly revised 19 in November, the group said. Economists polled by Reuters had predicted a reading of 20.

The index was at its highest level since May 2010.

“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets,” NAHB Chairman Bob Nielsen said in a statement.

After stagnating in a tight range for about a year, the index has been improving since October, giving weight to analysts’ views that the housing market is finally finding a bottom.

Even with December’s gain, home builder sentiment is still historically low and well below the 50 mark, indicating more builders view market conditions as poor than favorable. The index has not been above 50 since April 2006.

“We’re not looking for numbers next year to come anywhere close to the kind of numbers that we saw pre-recession, but we do think the housing market is setting up for a plus year in 2012 in terms of new home construction, as well as sales,” said Steve Blitz, senior economist at ITG Investment Research in New York.

The current sales component rose to 22 from 20, while the gauge of sales expectations for the next six months rose to 26 from 25.

There was little impact in financial markets from the data as investors focused on developments in the euro zone and uncertainty following the death of North Korean leader Kim Jong-il.