Bill Losey’s Weekly Economic Update for April 12, 2010

Did banks downplay risk levels? So contends a Wall Street Journal story, citing data from the Federal Reserve Bank of New York. It says that during the last five quarters, a total of 18 big banks reduced borrowing just before reporting debt levels to the public, then increased debt levels as the quarter progressed. The practice, while certainly legal, has prompted an SEC inquiry.

Inventories beat expectations. Wholesale inventories, that is. The Commerce Department said they increased by 0.6% for February, a hint that first quarter GDP might prove stronger than presumed. Economists had predicted a 0.4 gain.

Superb week for metals. As the EU moved to aid Greece, metals responded to the news with gains. Across last week, gold prices rose 3.18% to $1,161.90 an ounce. Silver gained 2.58%, copper 0.17%, platinum 3.19% and palladium 4.53% during those five trading days. Earlier in the week, concerns about a Greece default sent the 10-year note yield above 4% for the first time in ten months on April 5; yields were 3.88% on Friday afternoon.

Dow flirts with 11,000. The index actually climbed over that benchmark Friday, but settled at 10,997.35 as the trading week wrapped up. It gained 0.64% last week, while the S&P 500 advanced 1.38% and the NASDAQ 2.14%. The stock market has now climbed for six weeks in a row, the longest win streak on the Street since last April. Something else to note: the CBOE VIX, the “fear index”, finished the week at its lowest level since October 2007.