Friends
Domestically, the Empire State Manufacturing survey, Industrial Production and Consumer Sentiment numbers released this morning were more of the same of what we have seen lately. Combined with the other economic indicators this week, the picture of a slowing economy continues to unfold which paves the way, in many trader’s minds, for further action from the Fed. You know, bad news is good news, in that with more “easy money” or “cowbell” from the Fed, asset prices will rise. Never mind that the intended beneficiaries (folks on Main Street, not Wall Street) have not really seen any improvement in their search for the American Dream. You may wonder why, if stock prices are rising, I’m so cranky. Well, we have said for a while now, that we want good news to be good news, not bad news to be good news. We would like to see asset prices rise because the economy is doing well, not poorly. We don’t dismiss the reality of what happens with central bank intervention (no one has screamed louder for more than 3 years, Don’t Fight the Fed), but we have seen the law of diminishing returns take hold and we think that the asset price rallies will be shorter and shorter lived without any real world results. OK, I’m done now.
Of course, the major story will be the Greek elections this weekend, which the business channels are making sound like the future of the world as we know it depends upon. It seems like traders are more afraid of coordinated central bank action fueling stock prices than the negative implications of the election outcome. On that note, the bears have been running for cover this week as stock prices rose. For the day, the Dow Jones Industrial Average was up 115 points to close at 12,767. The S&P 500 was up 13 points to finish the day at 1342 (sitting firmly above resistance for the moment). Gold was up $6.40 to trade at $1625 per ounce, and oil was up slightly to close at $84 per barrel WTI.
We’ll keep an eye on the Greek elections over the weekend (who needs the U. S. Open?), and let you know how things develop on Monday.
Have a nice weekend everyone.
