Tuesday, March 01, 2011

S&P 500 gains 3.20% (not including dividends) in February, while Energy and Consumer
Discretionary are the top performing sectors.

Growth indicators came in stronger overnight with the China manufacturing PMIs remaining in
expansionary territory, PMIs out of India, Eurozone & UK all improving sequentially, European
Commission taking up its FY GDP forecast & the Eurozone unemployment (inc. Germany) fell faster than
expected.
Muni bond investors increasingly upbeat – a growing number of state and local government
experts think tax revs will return to pre-crisis levels within the next two years. – FT
Treasury holdings – the US Treasury has revised holdings data for foreign holders of
government debt, revealing that
China holds more Treasuries Foreign Holds of US Treasuries
than expected while the UK Canada, $77
Taiwan, $155
holds 50% less. China held Russia, $151
Caribbean,
$1.16T worth of Treasuries as of $169
the end of ’10 vs. $892B Brazil, $186
previously thought. The data
implies that 42% of China’s OPEC, $212 China, $1,160
reserves are in Treasuries vs.
France, $273
32% previously thought. “the
data suggests that worries UK, $637 Japan, $882

about China diversifying away

from Treasuries are overblown”.
– FT
Libya – the West is reshuffling military assets in the Mediterranean and North Africa to prepare
to help ease the situation in Libya. The Pentagon has redeployed Navy and Air Force assets closer to the
Libyan coast while several countries are considering enforcing a no-fly zone. Sec of State Clinton insisted
that the military shifts didn’t signal imminent military action. – FT