Friends
The interpretation that good news is really bad news continued today, as stocks sold off early and often. Consternation continued that the Fed may not be willing to provide more liquidity (punch for the punch bowl) and in the first hour of trading the Dow Jones Industrial Average suffered a more than 150 point drop. We settled in that area throughout the mid part of the day, and in the last hour managed to reduce a bit of the damage with the Dow finishing down 124 points to close at 13,074. The S&P 500 was down 14 points to close near 1399 (once again I would like to see 1400 held tomorrow). Gold took a beating with the precious metal falling $52 for the day to finish at $1620 per ounce. Oil was down $1.95 to close near $102 per barrel WTI.
The ADP employment report was positive this morning indicating that 209,000 new jobs were added to payrolls in March. That was just about as expected and a good precursor for Friday’s Government employment number. The ISM non-manufacturing (service sector) number came in just a hair less than expected, but certainly pretty much in line. On the global front, Spain had a less than stellar bond auction overnight which set a negative tone in the Eurozone.
With the market junkies suffering from possible Fed withdrawal (by the way, that is a big conclusion to jump to), it’s time to determine how much of the move in stocks over the past few years can be attributed to “easy money” and how much is attributed to an improving/ growing economy. We will discuss all of this in our second quarter outlook, which will be available next week. In the meantime, we will prepare ourselves for the employment report on Friday and the beginning of earnings season next week.
We’ll keep you up to date. Have a nice evening everyone.
