Another quiet session in a week full of them. The S&P 500 gained 0.23% and the NASDAQ 0.38% as morning weakness was bought. This is a good sign again, but these gains are of a grinding nature. Existing home sales for April fell 3.3%, missing an expected 1% gain to 5.24 million units. Earlier in the week, reports showed home builder sentiment fell in May, but housing starts for April came in much better than expected.Continue reading
While the indexes had a new 2 day rally Fri/Mon, it was difficult to really trust it because some secondary indicators (such as the NYSE McClellan Oscillator we cite often) have been trending in the wrong way. Today was a good example of why you want those secondary indicators to be in our favor before going all in, on a short term basis, in a market. The rug was pulled out from under bulls and those 2 days of gains were quickly wiped out – the S&P 500 fell 1.18% and the NASDAQ 1.55%. There was more drama in Europe as stocks and bonds sold off in Athens on news the International Monetary Fund may cut a funding lifeline to Greece unless its European partners accept more debt writedowns, the Financial Times reported. Germany’s finance minister later rebuffed the report . If you have followed Europe (or the world for that matter) since 2009 – you know how this works… a lot of huffing and puffing and then central banks or governments kicking the can down the road.
In economic news:
A report today showed the U.S. trade deficit widened in March to the highest level in more than six years, fueled by a record surge in imports as commercial activity resumed at West Coast ports following a resolution to labor disputes. The jump probably means the U.S. economy contracted in the first quarter when the Commerce Department issues revisions later this month.
U.S. indexes were in the red all day today as some quite miserable economic data didn’t do the normal trick of making everyone happy because it means the Federal Reserve will never raise rates in our lives. The S&P 500 fell 0.37% and the NASDAQ 0.63%. The Federal Reserve Open Market Committee released its meeting statement on Wednesday afternoon that removed all calendar references and showed no new guidance on the timing of the rate hike. So what was once seen as a rate hike in June, was pushed to September, and now sounds like it is being pushed to December. By the time they ever get around to actually raising rates the U.S. economy will probably be ready for a cyclical recession and it will be time to do QE!
“I don’t think anything has changed,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “There’s a clear indication the economy has slowed. The Fed is probably not going to hike rates until September. … The odds are increasing now for December.”
As for that bad economic report, the advance estimate of first quarter GDP showed an increase of 0.2 percent, a sharp slowdown from the fourth quarter’s 2.2 percent pace and below expectations of 1 percent growth. The government cited the strong dollar and the West Coast port strikes as negative factors.Continue reading
All systems remain go – when there is a potential change in the outlook we’ll be the first to note it but no clouds on the horizon right now. The S&P 500 fell 0.15% while the NASDAQ remains in a quite rare run here up another 0.42%. If not for yesterday’s fractional loss in the NASDAQ it would have been up 12 sessions in a row today. The S&P 500 has gained 5.8% in February, poised for the best monthly performance since October 2011, while the Nasdaq Composite has rallied 7.6%.Continue reading
Indexes shot out of a cannon Friday as it looked like stocks were going to build on the breakout over year highs accomplished yesterday but news that Russian forces potentially had entered Ukraine late in the day let to a sharp bout of selling and created mixed indexes at the close. The S&P 500 still finished up 0.28% while the NASDAQ dropped off 0.25%. Obviously any serious issue in Ukraine would be a potential short term issue for an overheated market.Continue reading
Stocks finished off their worst month of 2013, in losing fashion. The S&P 500 dropped 0.32% and NASDAQ 0.84%, essentially washing away yesterday’s gains as many headed off early for the holiday weekend, while others did not want to extend their exposure to stocks ahead of potential bombings of Syria in the coming days. For the month the S&P 500 fell 3.1% and the NASDAQ 1.0%. It was a very slow motion correction this month. There were two economic reports but they were mostly ignored.Continue reading
Like Joe Joe DiMaggio’s historic hitting streak, the 20 week run of positive Tuesdays for the Dow Jones Industrial Average finally came to an end. But not without a strong effort – after a mid afternoon sell off bulls came back into the index and had it within 0.2% of a flat, before some selling hit in the closing moments of the day. Tuesday was a relatively quiet news day but we saw a morning bounce turn into a bout of selling later in the session. QE this or QE that, we are in the first real multi week selling pressure of the year as this is the 3rd week without much participation by the bulls. The markets remain short term oversold but the bounces are wimpy. The NASDAQ fell 0.55% and the NASDAQ 0.58%. (The Dow was down 0.5% for those curious)Continue reading
Interesting session Tuesday as both the NASDAQ and S&P 500 made runs at early November highs but were rejected intraday, thus failing to create a new higher high – reversing the intermediate term pattern of lower new highs. However, the smaller cap oriented Russell 2000 did clear the highs from early November. Reasons cited for today’s move was a much better than expected business confidence report out of Germany, more quantitative easing from the Fed to be delivered tomorrow as well as progress on the fiscal cliff.Continue reading