First of all...I do apologize for being out of commission for a week. I had to undergo back surgery and the resulting consequences (pain and discomfort) were much worse than I had estimated them to be.
However...I am back now and fortunately not much happened during the last week. Markets have gained about 1 % during the last 5 trading days and if it wouldn't be for today I would almost start writing my blog exactly where I left it a week ago. (Pricewise this is)
Stocks opened stronger today and stayed in the green throughout the day. A midday auction of treasury bonds boosted prices and pushed the market to new session highs. The run up was short lived though and the last 2 hours of the day saw an extended sideways pattern emerging. The final 10 minutes of the day saw some selling which led to a mid range close.
The Dow closed + 31.29 points (+ 0.36 %) and the S&P managed to close + 5.68 points (0.61 %)
The perhaps biggest piece of economic news was the Retail Sales report for the month of May. After two month of straight declines the hope was for a positive number and we actually did manage to put a + 0.5 % number on the board. The number was initially well received. Upon further review though it turned out that once the increase in gasoline prices as well as the associated increase in prices within the food segment were taken out we are left with an anaemic increase of only + 0.1 %.
Not much to celebrate.
The weekly jobless claim number cam in better than expected....showing a decline of 24,000 thousand to 601,000 thsd people looking for first time unemployment help.
I keep on repeating myself but I have to say it again....a decline of 24 thsd to "only" 601 thsd filing for unemployment is not really good news in my book. To put it in a different perspective...whether it rains at a rate of 1 gallon per hour or 1.1 gallons per hour....either of those numbers will flood my basement over time.
Pretty much all of the major indices managed to trade new highs for the year. Unfortunately though no major follow through emerged and even though we closed solidly in the green there was a distinct absence of enthusiastic buyers.
The lack of buyers (or unwillingness of them) to really push the market aggressively higher would suggest that the air is getting thin up here. Friday might not be the day to expect an aggressive retreat from current prices but we should see a bigger move from here soon.
All trends are currently up...so my chips are on the side of the table which suggests higher prices.
Since the weak money tends to give way before a weekend tomorrows close should provide some important clues as to the short term direction of the market.
See you tomorrow,
Steve Benger
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