US Market Gets a Boost as Public Confidence Rises

Best Growth Stock – By the Dodd-Frank law, the Treasury secretary has been given the authority to decide whether foreign exchange swaps and forwards are to be included or exempted from the rules. Gensler had requested the lawmakers to keep the exemptions to a bare minimum. He said that he had been in communication with the officials in charge, but refused to openly express his opinions.

The Commodity Futures Trading Commission (CFTC) had the deadline set in July by the Congress to tie up its assortment of 40 odd regulations. However, these rules will not be set in motion this month as the agency is yet to make public two important rules defining swaps and outlining capital and margin requirements for swaps dealers and major players.

In the mean time, Gensler was in touch with the lawmakers to sanction more money for the agency. The CFTC’s budget has remained set at $169 million this year. It is almost 50 percent less than what they had expected. The Obama led government has proposed to raise it to $308 million for the year 2012. This will mean an 80 percent increase in their budget. The agency is hard put to get more monetary sanction from the Congress as the Republicans are asking the logic behind further stock market regulation. In reply to this, Gensler said that the agency needs funding to do its job efficiently.

February saw a huge surge in the consumer confidence. In fact, it is the highest in 8 months. The roots of this have been traced to the step up in the labor market and encouraging economic reports which have raised the confidence of the Americans people who had been going through a prolonged period of economic recovery. The February index of Thomas Reuters/ University of Michigan for preliminary consumer sentiment increased to 75.1 from the 74.1 calculated in January. This is in accordance to the predictions of the economists polled by Bloomberg News. Also, these sentiment figures show that the general public’s opinion of the economic condition and labor market has taken an upward swing for the first time in seven years.

Analysts are of the opinion that this rise in consumer confidence can transform into greater spending by the consumer. This is one of the most important factors affecting the GDP in the U.S. Millan Mulraine, the senior strategist at TD Securities commented that the spending pattern of the people depend on their take on job prospects. Rising confidence in that sector increases the probability of higher spending.

The survey which had classified people earning more than $75000 annually as affluent Americans, found out that their confidence level had attained the maximum level since the economic depression had started in December of 2007. The U.S. unemployment rate had fallen by 0.8 percentage points since November, the highest two-month drop since 1958. According to a Credit Suisse report, this has played a vital role in altering the view of the Americans in regard to job prospects.

Household purchases, which comprises nearly 70 percent of GDP has increased at a 4.4 percent annualized rate in the fourth quarter of 2010. The U.S. Commerce Department announced in January that this is the fastest rise since the first quarter of 2006.