Despite the global gloom that continues to cause significant concern about economic recovery virtually everywhere, the market pushed right through the resistance wall last week, threatened to give it back on Friday and this morning (Monday), but then continued forging ahead today.
It is difficult to grasp the resilience of the U.S. equity markets in light of our domestic crises – the staggering debt, unemployment hanging tight at close to 10 percent, the health care struggle, which may or may not be resolved by the bill that just passed Congress. There seems to be an implicit assumption by the marketplace that none of these looming dark clouds will actually threaten the ability of corporate America to shine on with at least modest profits.
The thing that stands out in all this is the trimming of the fat by Corporate America. Companies across a wide variety of industries have cut their budgets to the bone, which is why they’re making decent profits. In general, forward valuations are reasonable, so at least it isn’t a bubble (assuming analysts’ projections are in the general ballpark), and the dollar is holding its own against other currencies, deservedly or not. Read more…
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Since the market ditched its typical Monday mania today, maybe we can escape the inevitable depression that has followed in its wake.
For five consecutive weeks, the market has started with an up-day only to tank for the rest of the week. Some have blamed the Monday upsurge on weekend manipulation of the futures market. If that’s the case, it didn’t work today. Overall, the S&P 500 has fallen from a high of 1150 on 1/19 to a low last week of 1044, losing approximately -9% from its high five weeks ago.
In contrast, I would expect this week to be a rather quiet one, as upcoming economic releases are somewhat muted. Only the trade balance on Tuesday, retail sales and weekly jobless claims on Thursday, and consumer sentiment on Friday are thought of as potential market movers. Read more…
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Categories: What the Market Wants Tags: A, AGNC, CHT, CS, DIS, KO, LLY, PEP, PHM, S, UVV, WWE
Since the unemployment release of 10.2% on November 6, virtually all economic releases have been modestly positive and the late reporting companies have had strong results (including revenues) and strong guidance. So why has the market been going up and down on a daily basis over the past week?
The short answer is the dollar. Over the past several weeks, the market has seemed inversely tied to the value of the dollar. The dollar goes down, the market goes up; the dollar goes up, the market goes down. Generally speaking, the dollar has gone down, and the market has gone up. Read more…
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By David Brown, Chief Market Strategist, Sabrient Systems, LLC
David Brown
Initial signs of market weakness on Friday and again today (Monday) resulted in immediate support arriving to drive it back up. The underlying bid continues. Now that the bigger players are returning to their desks, volume should return, as well. So I’ll be interested to see which way it wants to go in the near term. A correction to the summer gains has become so anticipated that it might not happen…but I’m staying cautious. Read more…
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Categories: What the Market Wants Tags: CNX, COCO, CYH, energy, financials, market stats, S&P500, sectors, technology, telecom, UVV