Wall Street down, not out
by Peter Switzer
However there are other promising signs if you want to go looking. For example, last night consumer discretionary stocks and industrials were the standout performers. That means the share action was not defensive, which gives you the feeling that the market consensus created by the influential buyers and sellers is saying that this correction is close to done.
Of course, that will only be proved right if no shock, left-field piece of bad news bobs up and also if the weight of headlines starts to build up the positives over the negatives.
Saturday morning our time we could see the start of a flow of good news with retail sales, consumer sentiment and business inventories info to be released.
I have no leg-up on any of these indicators but this could be the start of something good or the continuance of the recent bad.
Moving the market
The Fed Chairman Ben Bernanke helped the stock market yesterday giving a thumbs-up to the US economic recovery, without trying to out a spin on it of Shane Warne proportions. The best thing about his comments were that they were believable.
The Chinese export rumours were also a positive contributor and the Fed's beige-book report did not give fuel to the bears’ fires.
The Dow lost 40 points or 0.4 per cent to 9,899.25 while the S&P 500 dropped 0.6 per cent to 1055.69.
It would have been psychologically better if the Dow could have held over 10,000 but simply the news has to get better to KO the Euro-anxiety that has gripped markets.
Long on good news
For those who missed it, unofficial news said Chinese exports grew about 50 per cent year on year. Meanwhile, the Beige Book, which is like a compiling of regional economic snapshots from the Fed, created a relatively positive picture.
However, there is nothing in it that says the Fed will increase interest rates soon and that should help investors wanting to go long on shares.
Another positive was the euro had a better day against the US dollar and oil crept up to US$73 a barrel. A higher oil price implies more optimism around a global economic recovery.
Of course, there was some bad news but it was small fry stuff and just for the day or maybe for a week or two, I am going long on good news!
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Published on: Thursday, June 10, 2010blog comments powered by Disqus