- The FBI, Justice Department and the SEC all announced this week that they are investigating whether high-frequency trading companies break insider trading laws by abusing the fast moving information that they are able to receive microseconds before investors. The traders in question are able to use this informational advantage to front run investor orders, generating riskless profit on their end. The announcements come of the heels of a media tour by author Michael Lewis, whose new book, ‘Flash Boys’, accuses the high-frequency traders of rigging the stock markets.
- The government has met its goal of signing up 7 million people for Obamacare by the end of March. Over 7.1 million Americans enrolled despite significant technical issues in the final days before this enrollment deadline. The administration failed to disclose the detail behind those who have signed up, including the most important metric for the success of the program: how many young people enrolled.
- China has unveiled another stimulus package as part of the country’s attempt to stabilize slowing growth and maintain confidence. The announcement comes even as the government looks to reform the economy so that it relies less on the state sector. The stimulus includes selling 150 billion Yuan ($25 billion) in bonds for railway construction, improved low income housing and tax relief for struggling small businesses.
- Stock markets made new all-time highs in the middle of the week before experiencing a sharp sell-off on Friday following the monthly jobs report. The S&P 500 was up 0.43% for the week, closing at 1,865.The Dow Jones rose 0.58%, closing at 16,412. So far in 2014, the S&P is up 1.45% and the Dow Jones is now down 0.39%.
- Treasury yields did not fluctuate much from last week despite seeing some moderate mid-week swings. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.71% and 2.73%, respectively.
- The spot price of WTI Crude Oil ended the week down 0.57%, closing at $101.09 per barrel. Year to date, Oil prices have risen 3.16%.
- The spot price of Gold rose by 0.70% this week, closing at $1,304.25 per ounce. Year to date, Gold prices are up 8.54%.
- Initial jobless claims rose by 16,000 from last week, coming in at 326,000 vs. consensus estimates of 319,000. The four week moving average for claims ticked up to 320,000.
- Monthly nonfarm payroll employment increased by 192,000 vs. expectations of 200,000 jobs gained. Revisions to the January and February reports added another 37,000 jobs. The unemployment rate held steady at 6.7% and the labor force participation rate rose by 0.2% in the month. Overall, the report was good but not great and employment numbers may have seen an artificial boost from the expiration of emergency unemployment benefits.
Fact of the Week
- According to the IRS, the total number of pages in the Federal Tax Rules has increased by 34,108 pages since 1995. Now standing at a total of 74,608 pages, the U.S. tax code has expanded by 5 new pages per day every day in the last 19 years.
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