Daily Market Update 2/27/09

Interest rates remained little changed Friday in spite of weaker than expected economic data. Fourth quarter GDP was revised down to -6.2%, well below forecast. The Chicago Purchasing Managers Index came in close to consensus but reflected continued contraction in the manufacturing sector. Investors concerned about growing government debt levels found no comfort in yesterday’s budget proposal by the Obama Administration. Although Congress is likely to make significant revisions, the plan calls for record deficit spending for the next ten years, even factoring in highly optimistic economic growth projections. Stocks and oil prices declined, the dollar strengthened against the euro. Next week’s economic data include Monday’s release of the Institute for Supply Management’s manufacturing index and Friday’s closely watched Non-farm Payrolls report for February.

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