Investor’s first read -Brooksie’s edge before the open
Wednesday, February 8, 2012 9:25 a.m. ET
DJIA: 12,878.43 S&P 500: 1347.05
Stocks are advancing from one end to the globe to the other, as news media blare progress on Greek debt talks progress.
Is contagion now off the table ? Safe to come out and play ?
If we aren’t going to get pulverized by a global meltdown, maybe it isn’t necessary to be invested in various safe securities/instruments that really aren’t returning enough to offset inflation. So far today, the U.S. stock futures are not as quick to jump on the bandwagon.
Many negatives remain , but the rhino in the room is European financial meltdown, and put that one in a cage and the other “walls of worries” can be absorbed.
Corrections will occur, but offer opportunities, not a road to ruin.
In spite a share gains in corporate earnings last year the S&P 500 was flat.
Without the risk of a global meltdown, why hide out is instruments yielding less than one-half of one percent ?
Volatility has taken a back seat, and steady accumulation is driving stock prices.
Time to go “all-in” ?
Of course not, but it is time to think longer term, to think out 9 to 18 months to economies , that are shifting into second gear. At that time many stocks will have had a nifty run, rewarding investors for their prescience. New investing will be done in stocks sporting higher multiples, like it or not.
CONCLUSION: I have been expounding that the BIG story of 2012 will be a stampede out of safe haven securities and into the stock market. Many things still stand in the way, (Europe, Mid-East, politics, etc), but “they” will ALWAYS be there. I thing it has begun to happen, reluctantly.
TODAY: Slow start, possible drop to DJIA 12,818 (S&P: 1340). News has been good, so the market is a wee bit vulnerable to bad news, but nothing that justifies ignoring stocks.
- ICSC Goldman Store Sales (7:45 a.m.) by major retailers which account for 10% of total store sales.
- Consumer Credit (3:00 p.m.) –Consumer credit jumped $20.4 billion November.
- MBA Purchase Applications (7: 00 a.m.)as a measure of applications at mortgage bankers, this index provides leading indicator of single family home sales and housing construction.
- Jobless Claims (8:30 a,m.) Initial claims dropped 12,000 for the week ending Jan. 28 to 367,000. Obviously “down: is good.
- Wholesale Trade (10:00a.m.) – slowed to 1 0.1 percent gain, Inventory/sales ratio holding at 1.15.
- International Trade (8:30 a.m.) Trade gap widened in Nov. due to jump in oil imports and dip in exports. The index is comprised of merchandise and services
- Consumer Sentiment (9:55 a.m.) Rose in the final week of January, Sentiments have been soaring since July.
Jan 23 DJIA: 12,720 “Europeans Seeking Long-Term Economic Cure“
Jan 25 DJIA: 12,675 “Consolidation, Correction Likely though US Stocks Hold Strong Against EU Turmoil“
Jan. 26 DJIA: 12,756 “Fed Would Raise Interest Rates If Inflation Picks Up“
Jan. 27 DJIA: 12,734 “Warning! Tradable Market Action Lies in Waiting“
Jan. 30 DJIA: 12,660 ““HUGE” Week for Economic Indicators“
Jan. 31 DJIA: 12,653 “All That Is Needed Is a Spark“
Feb. 1 DJIA: 12,632 “Week’s Economic Reports Could Be The Springboard“
Feb. 3 DJIA: 12,862 “Investors Beating the Bullish Tune“
Feb. 6 DJIA: 12,845 “Follow the Money as It Exits Safe Havens“
Feb. 7 DJIA: 12,878 “Market Held Up By Sneaky Buying“
The writer of Investor’s first read, George Brooks, is not registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.