Market Soapbox 05/26/05
Resistance: DJIA 10600; SP500 1200; Nasdaq 2100; NDX 1550
Support: DJIA 10400 ; SP500 1180 ; Nasdaq 2000; NDX 1500
Positive: everything else
Weak: gold bugs, REIT's.
Economic Reports of Note:
FRI: Personal Income (est. 0.6%, prev. 0.5%); Personal Spending (est. 0.8%, prev. 0.6%); Michigan Sentiment Revised (est. 85.3, prev. 85.3)
European & Asian markets were up. Dollar up vs. Yen/Euro, commodities up, oil, gold & bonds down. Contra action: $ & commodities up. Core PCE unch @ +2.2%, Chain Deflator +3.2% (est.3.2%, prev. 3.2%); GDP Prel. 3.5% (est. 3.6%, prev. 3.1%); Jobless Claims 323K (est. 326K, prev. 321K)
GDP estimate is up, Core PCE & Chain Deflator stayed the same and Jobless Claims +2K. This shows that there is underlying economic activity and inflation or stagflation is on the rise, thus rates will continue to rise.
Today's Soohey Pig Pig!! Award goes to me for letting the pig have a quiet day in its poke.
An upbeat day as economic news was cheered and inflationary concerns were forgotten. Stocks, bonds and commodities shrugged off rising oil (closing down after late profit taking) and a strengthening dollar as 10 of 10 sectors were up on lite volume.
Tech, semis, internet infrastructure (+4.5%) and transports prospered, the dollar is at a level not seen since October 2004 and July Oil futures are hovering about $51.
The bond party continued with the 10 year note @ 4.09, 30 year bond @ 4.42, the spread is 33 basis points. See todays Yield Curve Inversion IV for further details as to why this is not a good situation.
The chain deflator and stronger dollar were ignored today, as everything rose in lock step. Rising oil prices and transports, rising dollar and materials, a mix which indicates optimism in economic conditions with little regard for inflation and higher interest rates.
On May 29th or June 1st , the dollar and market could get a huge boost. The French and Dutch are ratifying the EU Constitution by referendum on those respective dates.
So far, seven countries have ratified by parliamentary vote, public referendums are another animal. A NO by any member state would be a setback for the Euro. The latest polls in France show 47% Qui vs 53% No. In the Netherlands 43% Ja vs 57% Neen.
Tomorrow, I look for sideways action and profit taking before the 3 day weekend on low volume. Tues, the day after Memorial Day theres a 55% chance of a down day historically.
We take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong. P.S. Please read last Friday's Vacation posting
Support: DJIA 10400 ; SP500 1180 ; Nasdaq 2000; NDX 1500
Positive: everything else
Weak: gold bugs, REIT's.
Economic Reports of Note:
FRI: Personal Income (est. 0.6%, prev. 0.5%); Personal Spending (est. 0.8%, prev. 0.6%); Michigan Sentiment Revised (est. 85.3, prev. 85.3)
European & Asian markets were up. Dollar up vs. Yen/Euro, commodities up, oil, gold & bonds down. Contra action: $ & commodities up. Core PCE unch @ +2.2%, Chain Deflator +3.2% (est.3.2%, prev. 3.2%); GDP Prel. 3.5% (est. 3.6%, prev. 3.1%); Jobless Claims 323K (est. 326K, prev. 321K)
GDP estimate is up, Core PCE & Chain Deflator stayed the same and Jobless Claims +2K. This shows that there is underlying economic activity and inflation or stagflation is on the rise, thus rates will continue to rise.
Today's Soohey Pig Pig!! Award goes to me for letting the pig have a quiet day in its poke.
An upbeat day as economic news was cheered and inflationary concerns were forgotten. Stocks, bonds and commodities shrugged off rising oil (closing down after late profit taking) and a strengthening dollar as 10 of 10 sectors were up on lite volume.
Tech, semis, internet infrastructure (+4.5%) and transports prospered, the dollar is at a level not seen since October 2004 and July Oil futures are hovering about $51.
The bond party continued with the 10 year note @ 4.09, 30 year bond @ 4.42, the spread is 33 basis points. See todays Yield Curve Inversion IV for further details as to why this is not a good situation.
The chain deflator and stronger dollar were ignored today, as everything rose in lock step. Rising oil prices and transports, rising dollar and materials, a mix which indicates optimism in economic conditions with little regard for inflation and higher interest rates.
On May 29th or June 1st , the dollar and market could get a huge boost. The French and Dutch are ratifying the EU Constitution by referendum on those respective dates.
So far, seven countries have ratified by parliamentary vote, public referendums are another animal. A NO by any member state would be a setback for the Euro. The latest polls in France show 47% Qui vs 53% No. In the Netherlands 43% Ja vs 57% Neen.
Tomorrow, I look for sideways action and profit taking before the 3 day weekend on low volume. Tues, the day after Memorial Day theres a 55% chance of a down day historically.
We take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong. P.S. Please read last Friday's Vacation posting
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