Friends
Stocks looked to be on course for another slightly up day, before a rumor about a pending Wall Street Journal article indicating that the Fed might be willing to ease up on asset purchases sooner than later, sent the indexes to their first loss in days. On the economic front, the weekly jobless claims number was, for the second week in a row, a pleasant surprise, perhaps indicating that at least layoffs seem to be subsiding. Now is hiring accelerating? Well, no, there is no evidence of that. Nevertheless, the claims number was a welcome piece of news. Remember, whenever the Fed does let on that they will begin taking the punch bowl away, stocks will most likely fall. The key will be, will the economy be strong enough at that point to carry the water? We shall see.
Anyway, for the day, the Dow Jones Industrial was down a modest 22 points to close at 15,082. The S&P 500 was down 6 points to finish the day at 1626. Gold was down $18 to trade at $1455 per ounce, while oil was down $.77 to trade at $95.85 per barrel WTI. Bulls would like to see 1625 hold for the week, but we have moved so far so fast, that support and resistance levels are hard to pin down. We are trading well above the 50 day moving averages, so a bit of mean reversion seems likely soon.
As for earnings season, we came into this quarter with analysts expecting a 1% decrease in earnings from last quarter. Instead we got about a 5% increase with many companies beating what had been reduced estimates. All in all, this earnings season was a success, especially given the negative sentiment going into it. We’ll see how the week ends up tomorrow.
Have a nice evening everyone.
