Friends
Regardless of the stock markets confusion this week, the news on the domestic economic front has been pretty darn good. On Monday we had a better than expected ISM manufacturing number and today we got a better than expected ISM non-manufacturing (service sector) number, which affirms the service sector hiring we saw in the better than expected ADP jobs report number this morning. That’s a whole lot of “better than expected” so far this week. Of course, we still have Friday’s non-farm payroll to look forward to, but so far so good.
As for stocks, the Dow Jones Industrial Average was up 12 points to close at 13,495. The S&P 500 was up 5 points to finish the day at 1451. Gold was up $4.80 to trade at $1780 per ounce, while oil was down a whopping $3.93 to trade at $87.96 per barrel WTI.
Remember, for a long time now the economy and the stock market haven’t necessarily moved in the same direction. Indeed, we have had stock prices grow for over 3 years now, while at the same time most of you would confirm that the economy has certainly not been that good. Stocks have been fueled by the Fed’s liquidity, but we have been waiting for the economy to benefit from all of this medicine. Perhaps we are seeing some signs of improvement in the economy. Now wouldn’t that be nice? As we have said, ad nauseam, we like when stock prices rise, but we would like that to be because fundamentally things are getting better, not just because the Fed keeps pumping medicine into a sick patient. We’ll see if the employment number on Friday can keep the momentum going.
Have a nice evening everyone.
