It doesn’t take long for stock market rally attempts to meet sellers, suggesting the market needs some kind of flush before a meaningful attempt to turn the corner.
More technical rallies? Yes! But a turning pattern will require the perception by the BIG money of an improvement in both the economic news and the deficit reduction/debt ceiling approval picture, or – lower prices that fully discount these uncertainties.
The market should get initial support in the DJIA 11,750 (S&P 500: 1250) area where another rally can develop. However, news coverage of continued brinkmanship in Congress over raising the debt ceiling stands to drive stock prices lower, suggesting this issue needs resolution – pronto.
Brooksie’s Daily Stock Market blog: An edge before the open.
Thursday, June 16, 2011 9:23 am EDT
S&P 500: 1265.42
Nasdaq Comp: 2631.46
Russell 2000: 779.46
It’s nothing new when presidents and top party rivals get out for a little friendly golf amidst an unfriendly atmosphere. This time seems a little orchestrated, I mean don’t President Obama and House Speaker Boehner chat in person or on the phone otherwise. Isn’t a game of golf Saturday a bit too visible ? Clearly golf will be on a lot of minds, the U.S. Open starts today. While Boehner (handicap 8) may have to give the president (handicap 18) a few strokes, it is doubtful he plans to concede much more.
But, compromise is the way most things get done in D.C., and especially on the big issues.
Looks like the stage is being set for an announcement in the near future on two things – meaningful deficit reduction and an O.K. on raising the debt ceiling.
With national and global financial markets still shaky, the risk of U.S. default on certain obligations is not the tonic that is needed at this time. Common sense dictates that Congress is feeling pressure from very, very powerful people about playing games with the debt ceiling.
Meanwhile, economic reports continue to disappoint, including Industrial Production and the Empire State Index of business conditions. The Consumer Price Index rose a bit more than projected.
Certain pockets of the economy may pick up later in the summer now that the drag from Japan’s woes and weather related adversities are behind us.
U.S. Housing Starts and building permits for May came in a little better than expected today.
Jobless Claims declined 16,000, a minor positive.
The Philly Fed Survey, due at 10 o’clock, is expected to show business growth in the region.
The European sovereign debt problems persist with speculation one hour that Greece’s predicament is hopeless, then the next hour expectations for a new rescue effort.
The writer of Brooksie’s Daily Stock Market blog, 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