Business News
Buyer and seller shortages
by Peter Switzer
The S&P 500 again put in another up day — that’s seven in a row — but it hasn’t crashed through the 1300-level. That shows enthusiasm isn’t out of control and so it’s a waiting game as good news battles bad news.
The latest good news out of the US was the Beige Book, which is released by the Fed, and it showed many economic regions in the States are continuing to improve.
To the scoreboard, the Dow lost 13.02 points to 12,449.45 but the S&P 500 put on a measly 0.4 of a point (but it was still up), to wind up at 1292.48.
Good signs that banks are back in favour and a softer euro isn’t spooking the market are key developments but we’re still in the hands of what Europe comes up with.
EU events
Tomorrow the European Central Bank makes a decision about interest rates and a number of bond auctions are on the horizon. These events have the potential to test out the proposition that the US is decoupling from the EU’s woes.
I don’t think that’s right completely but we won’t know if it’s true until Europe comes out with a very negative news development, and frankly I hope we don’t have to see such a thing.
It was a good sign that the euro’s dive didn’t bowl over Wall Street and even material stocks went up nicely. BHP was up over 0.5 per cent and that should help our market today.
Beaten up stocks revisited
On the US bank stocks front, investors are starting to revisit these beaten up stocks and that’s a positive omen. Bank of America is up 23 per cent this year!
In summary, we’re holding the line after a nice rise that came out of the late Santa Claus rally. There’s a shortage of strong buyers and a shortage of sellers and with the US economy clearly on the mend, only Europe can make or break this nice start to 2012.
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Published on: Thursday, January 12, 2012
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