Friends,
After yesterday’ s drubbing, stocks made a small comeback today buoyed by more positive domestic economic news. A slew of economic numbers were released this morning including a surprisingly good initial jobless claims number (366,000 new claims vs. 390,000), an Empire manufacturing number of 9.5 (which was well ahead of expectations), and a muted PPI number. Later we got a nice Philly Fed number of 10.3 which again was better than expected. As the domestic picture continues to surprise to the upside, it continues to exist in the shadow of the slowing global economy. We worry daily about the disaster that is Europe, but the slowdown in China is easily as threatening to the global growth story. This is the environment traders find themselves in as the year comes to a close. Market participants seem to just want to get to the finish line at this point without any more damage. Chances of a Santa Claus rally seem remote, but perhaps the negative sentiment can provide the backdrop for a little pop at year end.
In the meantime, the Dow Jones Industrial Average was up 45 points for the day to close at 11,868. The S&P 500 was up 4 points to finish the day at 1215. Gold, after being crushed yesterday, was down again today falling $17 per ounce to finish the day near $1569. Oil continued its recent decline falling another $1.36 per barrel to close near $93.59 WTI. On a technical basis, it’s difficult to get traders interested in a year-end rally unless we can get above 1265 on the S&P and comfortably above 12,000 on the Dow.
As the Euro has lost value and the dollar has risen, the risk off trade has taken hold in commodities, which will actually help middle class America right now, as the things that we use every day will be cheaper; gasoline, groceries and clothing. The key will be how stocks react to a rising dollar. Through most of 2011, when the dollar fell, stocks would rise and vice versa. We will see if stocks can break the pattern and rise with a rising dollar. Trading continues to be very light and it doesn’t seem likely that will change as the holidays approach. We’ll still keep a look out for Santa, but we’re not holding our breath.
Just a heads up! Check out our new and improved web site at www.chjwealthmanagement.com . You can find our daily updates as well as our previous quarterly outlooks. Also you can keep an eye on our scheduled events and any news updates. There also is a link to Schwab to access your accounts. Let us know what you think or if there is anything you would like us to add.
Have a nice evening everyone.
