Friends
Though the final numbers don’t indicate much, stocks experienced an impressive reversal today, as at one point this morning the Dow was sporting a nearly 400 point decline. That loss was erased in the midday portion of the trading session, and stocks then drifted aimlessly over the last couple of hours of trading. Once again, the pattern has been typical during this entire earnings season- goods earnings are met with a total lack of enthusiasm and almost immediate selling pressure. Some have asked recently why stocks are struggling just as the economy and earnings are good? The simple answer is that the stock market is regarded as a leading indicator. The rise in stocks last year was predicting the economic and earnings success we are seeing at this moment. Another way to look at it is that we borrowed the gains resulting from earnings that we are seeing now 6 months ago. But just because the stock market is regarded as a leading indicator doesn’t mean it is always right in its prediction. Could the current slump is stock prices be predicting an economic and earnings slowdown? Sure, but that doesn’t mean that is what will happen. Welcome to the wonders of the stock market-it might be perceived as a bit goofy if it wasn’t such a magnificent creator of wealth over the long haul.
For the day, the Dow Jones Industrial Average was up 5 points to close at 23.930. The S&P 500 was down 5 points to finish the day at 2,629. Gold was up $7 to trade at $1,312 per ounce, while oil was up $.57 to trade at $68.50 per barrel WTI.
Along with more earnings reports we get the non-farm payroll number tomorrow. Remember, experts are looking for about 190,000 new jobs to have been created in April. We’ll let you know how the week finishes out tomorrow.
Have a nice evening everyone.
