Boom on the Dow
by Peter Switzer
This is bad news for the bears who have been trying to talk the market down. Once again, the six per cent or so pullback has been another buying opportunity that a hell of a lot of nervous Nellies have missed.
First, we saw the second straight month of gains for retail sales. Second, the ringing endorsement from Cisco’s CEO, John Chambers, that saw great things for his company in a recovering US economy. Third, another run of better than expected earnings reports form big name brand names. Fourth, better than expected weekly jobless claims and productivity numbers.
The Dow, the S&P 500 and the Nasdaq all put on close to or more than two per cent, which is a nice comeback following eight out of the past 10 days have been down and out on Wall Street.
More productivity, less jobless claims
The big number that got a bit of excitement happening was a 9.5 per cent gain in productivity during the third quarter. This is the first step to encouraging companies to start hiring again.
Following better retail news, big names such as Nordstrom and Gap have come in with better than expected sales.
The jobs news was pretty good too, with new jobless claims and the four-week moving average of claims dropping to 10-month lows. This is a good sign that the US bosses are slowing down their “clean out your desk and go” notices.
But all of this great news faces a big test tomorrow with the October jobs report. The key number is 175,000. This is what economists expect has been cut from non-farm payrolls over the month, which will bring the US jobless rate to 9.9 per cent.
For we Aussies worried about our rising home loan interest rates, in America the 30-year fixed rate home loan has now fallen below, wait for it, five per cent! Wouldn’t you love to get a piece of that action? I want to know why we can’t access products like that.
I guess the answer is you have to have an economy that is virtually shot to pieces and is being put back together by nice little products like a 30-year fixed rate at 4.98 per cent.
Keep your fingers crossed for a better than expected jobs number tomorrow but this could be wishful thinking.
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Published on: Friday, November 06, 2009blog comments powered by Disqus