Chalk it up to be another sign of a recovering U.S. economy. The trade deficit widened last month, giving support to today’s rally in stocks and exchange traded funds (ETFs) after yesterday’s pause.
The International Trade Report released early Wednesday showed the March trade gap widened slightly to $40.4 billion from a revised $39.4 billion mark in February. However, the trade gap was smaller than the expected figure of $41 billion, due in part to the sharp increase and quantity of energy imports. Overall, imports and exports jumped 3.1% and 3.2% respectively, while the trade deficits with most major trading partners widened, including those with China, Japan, and the European Union.
Despite widespread problems, Europe showed modest growth for the first quarter, as GDP expanded by 0.2% in both the 16-member euro area and 27-member European Union. While demand in countries like Germany and France remained sluggish despite recovery efforts, analysts noted that business surveys point to a stronger increase from the end of the 1Q into the beginning of the 2Q. [Euro ETFs Out of the Woods?]
- iShares MSCI EMU (NYSEArca: EZU)
Morgan Stanley (NYSE: MS) shares dropped early Wednesday as reports of a investigation into mortgage derivative deals was released. Shares fell $1.13, or 4%, to $27.25 in morning trading, as federal prosecutors are set to probe Morgan Stanley’s potential role in misleading investors in a pair of $200 million derivatives. However, a spokesman for the firm said it not been contacted by the Justice Department, and had not received a Wells Notice, which alerts a company to potential charges from the SEC.
- Financial Select Sector SPDR (NYSEArca: XLF)
Gold hit record-highs after surpassing the $1,227 per ounce mark to close Tuesday at $1,233. With a 9% increase year to date, and analysts predicting more room to grow, gold has many investors wondering if it’s too late to invest in the commodity. While speculation surrounds the true value of gold, a majority of analysts believe gold will stay above the $1,000 mark based on the recent market volatility and the global economy as a whole. [As a Haven or a Hedge, Gold and Silver ETFs Have Appeal.]
- SPDR Gold Shares (NYSEArca: GLD)
Aaron Hurst contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.