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Retail sales the full monty

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by Peter Switzer

If only Europe could deliver a credible rescue plan, we then would see a massive take off of the stock market. However, that looks a long way off but we can live in hope, as so many other threats to the global economy and stocks are following the script I have been predicting for the past few months.

We know China is heading for a soft landing and that puts one concern to bed. Overnight, the Yanks got a very solid retail number and now the hotshot US economists are actually marking up the expected economic growth figures for the final quarter of 2011.

On Wall Street

There was some good news out of Europe with Mario Monti, the designate PM for Italy, informing the country he would be able to put a cabinet together. That kicked up US stocks and it underlines how Europe is the main game.

The Dow ended up 17.18 points, or only 0.14 per cent, to 12,096.16 but it was higher earlier. The S&P 500 index put on 6.03 points, or nearly 0.5 per cent, to 1257.81 while the Nasdaq was up over one per cent.

Helping these latter indexes had to be the October retail results, which beat expectations. These rose by 0.5 per cent compared to September but were up 7.2 per cent on the same month last year! Meanwhile the Empire State Manufacturing Survey’s general business conditions index for the state of New York went up in November after five months of shockers. I reckon this is a turning point indicator.

After seeing today’s economic data, Merrill Lynch and Morgan Stanley lifted their forecasts for US economic growth.

Half monty vs. full monty

As an economist, financial commentator and financial advisor, I can read economic and financial indicators pretty damn well but I can’t admit to reading European politicians — these people are not my kind of people.

To be clear, I think the progress in Italy is a ‘half monty’, as some uncertainty persists.

I guess when Europe shows us the full monty — that is, it reveals its plan with everything on show — then the stock market will be stimulated to much higher levels.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Wednesday, November 16, 2011

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