From a percentage standpoint, the gain shows continued improvement.

Meanwhile, retail sales continue to falter, sales rose 0.6 percent for wholesalers – the first monthly increase in eight months – with supplies posting a sharp decline of 1.5 percent, the biggest drop since 1992. That leaves about 1.34 months of supply in stockpile. That’s great news in that, once demand begins stabilizing, production activity will have to ramp up. Ideally, that will mean putting people back to work.

In that vein, initial jobless claims fell by 20,000 filings from the prior weeks’ revised number to 654,000. While that’s still an extremely high number in historical terms, it continues to show a slowing in the pace of layoffs. Unfortunately, continuing claims are climbing, up to 5.84 million jobless claims from the prior weeks’ 5.745 million claims. So while the pace of layoffs may be slowing, it’s still extremely difficult to find alternative employment.

In the not so good news category, consumer credit contracted sharply in February, falling by $7.5 billion. Almost all of the decline came from revolving credit lines, i.e. credit cards. The contraction there, while good in and of itself, is problematic since laid off workers don’t have access to credit to float themselves until they find other work. And while you can’t blame the banks for not wanting to bet on someone who is out of work paying off their debt, those reductions lead to lower consumption.

The US trade deficit continues to narrow, contracting by 28 percent in February to $26 billion, a new 10-year low. Exports rose 1.6 percent to $126.8 billion while imports continued to fall, down 5.1 percent as the consumption of foreign goods and services fell to a four-year low. A major factor in the import plunge is that fact that the US is importing less petroleum, metals and chemicals from elsewhere.

In continuing signs of the time, it appears that the insurance industry is about to be the latest to be bailed out. While no definite decisions have been made to who and how much, the Treasury has confirmed that there are a number of life insurers who also own thrifts or have bank holding company status and will be able to tap money via the government’s Capital Purchase Program.

One name immediately comes to mind most likely needing cash, MetLife (NYSE: MET).  It’s been a bank holding company since 2001 and many analysts believe the insurer could be sitting on as much as $30 billion of unrealized losses.

One insurer that I’ve always liked and that seems unlikely to need a cash infusion is Chubb Corporation (NYSE: CB). Sitting on about $2 billion in cash and a conservative investment portfolio, it got out of the credit default swap business in 2003 and hasn’t had heavy involvement with mortgage-backed securities. Business has dropped off a bit, but overall it’s a rock solid insurance company.

On the topic of financials, Wells Fargo (NYSE: WFC) helped to buoy the markets today with an extremely optimistic earnings forecast for the first quarter. It expects profits of $3 billion, or 55 cents a share, more than double the street estimate. While that’s good news, it’s not that hard to hit those kind of numbers when you have another major bank essentially handed to you. It also doesn’t hurt that the field of competition has narrowed substantially.

There’s also word that the government won’t be looking to close any of the 19 largest banks based on the results of the ongoing stress tests, which is good and bad. It’s good in the sense that financials are enjoying quite a rally, but bad in the sense that there’s still going to be a lot of garbage to be dealt with. And while I’m cautiously optimistic on the Public Private Investment Partnership program – I think it could great opportunities for both institutional and retail investors – I just don’t think it will go far enough towards cleaning up balance sheets. Plus, I just don’t see the point of conducting the stress tests if they’re not going to be somehow acted upon. Otherwise, the government could just keep handing banks cash and save itself the effort of looking at the books.

My colleague Elliott Gue attended the Energy Information Administrations weekly conference this week and came away with some interesting information on the energy markets. It’s definitely worth a read.

“The Energy Information Administration (EIA) kicked off its annual two-day energy conference April 7th in Washington, D.C.

The conference schedule took a two-part format, with a morning plenary session followed by a series of 90 minute concurrent sessions. Unfortunately, some of the most interesting concurrent sessions overlapped, so I was forced to make some tough choices as to which sessions to attend.

Here’s a rundown from some of my notes on two sessions.

This year’s plenary session was well attended and featured three speakers: US Secretary of Energy Dr. Stephen Chu, Yale University Professor of Economics William Nordhaus, and Exelon Corp (NYSE: EXC) CEO John Rowe.

The keynote address by Dr. Chu was clearly the most widely anticipated of the three addresses. A full analysis of the comments and points he made is enough to fill up several TEL issues, as he outlined the Obama administration’s basic energy policy. I’ll focus on my general impressions in this issue and revisit the topic on At These Levels or in a future Energy Letter.

The most striking thing about Dr. Chu’s comments was just how little he mentioned oil, coal, natural gas and nuclear power. The secretary highlighted the fact that Americans are heavily dependant on oil imports, and how expensive those imports are. He also showed an interesting chart that highlighted the correlation between US recessions and spikes in the price of oil.

Finally, Dr. Chu, as expected, spent considerable time discussing climate change and the need to develop new low-carbon or carbon-free sources of generation.

However, after the first few slides he said very little about conventional energy sources and the future of nuclear power. In fact, he mentioned nuclear power on just one occasion, in response to one of the two questions he took at the end of his session. This is striking to me because these four sources of power account for nearly 93 percent of US primary energy consumption. And according to the EIA’s own estimates, these three sources of energy will still make up more than 90 percent of the total in 2030.

Generally speaking, Dr. Chu’s comments were aimed at highlighting some of the research and work being done by the Department of Energy (DoE) on renewable sources such as solar and wind. He also defended the stimulus package passed in February as a key aspect of US energy policy; the package included funding for key DoE projects.

And Dr. Chu also outlined the importance of energy efficiency. Improved energy efficiency is the low-hanging fruit of energy policy, the fastest and cheapest way to reduce consumption and emissions. The stimulus bill included several initiatives to improve US energy efficiency, including programs aimed at low-income families.

Dr. Chu also addressed concerns about the economic impact of proposed regulations to limit the emission of carbon dioxide and other greenhouse gases. Broadly, the secretary stated that economic growth doesn’t necessarily mean greater energy consumption, at least for developed countries, citing a chart that plotted the Human Development Index (HDI) against energy use for various countries around the world.”

Click here for the complete article.

Speaking Engagements

I’d like to extend a special invitation to Friday Market Wrapup readers to attend the Atlanta Wealth Conference, hosted in a beautiful mountain setting in northern Georgia. This conference has always been a personal favorite of mine, as it’s smaller than most with only 175 attendees.

Even better, proceeds from the conference all benefit a worthy cause, Friends for Autism.  The conference lasts from Thursday, April 23, through Saturday, April 25. Meals are included for the special discounted price of $459 for a single and $599 per couple.

For more information, please visit http://www.aicatchota.com/?kloc=NONE or call 770-952-7861 and let them know I sent you.