Friends,
As stocks meandered all day long and into the close, let’s just take a moment to review the current situation. Today’s Leading Economic Indicator (LEI) number was better than expected. Add that to recent numbers including better than expected October retail sales, ok Philly Fed number, improving initial jobless claims numbers, NAHB home builder index better than expected, and CPI and PPI numbers showing less inflation than expected. All these are positive developments. Heck, we were happy with the 1% growth in GDP in the first half of the year, thankful we just weren’t in a recession. Now we have third quarter GDP at 2.5% at first blush, with the expectation that the 4th quarter might come in even better (seeing 3.5% estimates lately). So what’s the problem this week? Well, first of all, on the domestic front, we have the special budget super- committee about to disappoint us next week, and, of course, we have interest rates in Spain, Italy and France rising rapidly, with Italy and Spain getting into dangerous territory. The global macro worries have continuously overshadowed the domestic economy in recent times, and this week was no exception.
How did stocks do today? Well it was a rather quiet option expiration Friday (volume was very light all week), with the Dow Jones Industrial Average finishing the day up 25 points to close at 11,796. The S&P 500 was down less than a point to finish the week at 1215. Gold was up about $4 to finish the week at $1723 per ounce. Oil fell for a second day in a row and was down $1.41 to trade near $97.41 per barrel WTI. At least we got oil back below $100. On a technical basis, there was some damage done this week in the S&P but it wasn’t catastrophic. To get into Santa Claus rally mode we need to get that S&P back up over 1260. We would sure like to get the Dow back above 12,000 also.
As we enter the holiday season, investors will be trying to decide if the improving domestic economy and strong corporate profits will be able to break the chains of a tenuous global environment. Thanksgiving week is typically quiet, but this coming week may be different with all the various things going on both here and abroad. We’ll be here to keep you informed.
Have a nice weekend everyone.
