Investor’s first read – Brooksie’ edge
Wednesday, February 29, 2012
DJIA: 13,005.12 S&P 500: 1372.18
My apologies for a late report today. My post was written by 9:05 when my screen and saved report disappeared totally.
I really don’t see a close of the DOW above 13,000 as a big deal; it’s just a number. I expect the overall market to stall, but individual situations to flourish.
Q4 GDP was revised to read a gain of 3.9% vs. its last estimate of 2.8%. Inventory rebuild accounted for 1.88 percentage points of the gain, though its pace of expansion slowed. Firmer consumer spending and even home building added to the improved read.
Gasoline prices have increased 12.6% (42 cts/gal) this year and could be a drag on economic growth as they were last year.
A breakout above DJIA 13,030 should be worth another 100-140 point rise. Minor support is DJIA 12,925. Focus should be on individual situations, not the market averages as long as this stall in the overall market persists. This can be a difficult market to make money in the major market averages/ indexes ETFs, for the time being.
ECONOMIC REPORTS: As long as U.S. economic indicators signal recovery, these reports are only a minor driver of stock prices. Should they soften, the market will go into a nasty correction.
- Pending Home Sales (10 a.m.) Fell in Dec. after 7.3 pct. gain in Nov. and 10.4 pct. gain in Oct. Year on year sales gained 5.6 pct.
- Durable Goods (8:30 a.m.) rose 3 pct. in Dec. after 4.2 pct rise in Nov..
- S&P Case Shiller Home Price Index (9 a.m.) Dropped 0.7 pct. in Nov. for sixth time.
- Consumer Confidence (10 a.m.) dropped to 61.1 in Jan. from 64.8 in Dec.
- GDP (8:30 a.m.) for Q-4rose 2.8 pct. from Q3’s 1.8 pct., but most of rise was accounted for by an increase in inventories.
- Chicago ISM ( 9:45 a.m.) regional manufacturing dropped 3 points to 60.2, but is well above the “50” threshold for growth.
- Beige Book (2 p.m.) comments follow regarding economic outlook. It is released two weeks before FOMC meets.
- Motor Vehicle Sales (time: ?) Auto sales jumped 13.8 pct in Jan., trucks declined 4 pct. the first time in nine months autos outsold trucks.
- Jobless Claims (8:30 a.m.) Were unchanged for week ending Feb. 18
- Personal Income and Outlays (8:30 a.m.) P.I. increased 0.5 pct in Dec. following a 0.1 pct increase in Nov.
- ISM Manufacturing Index (10 a.m.) Rose one point in Jan. to 54.1 thanks to new orders which were up 2.8 pct.
- Construction Spending (10 a.m.) Jumped 1.5 pct. on top of a November increase of 0.5 pct..Private nonresidential outlays were ahead 3.3 pct..
Feb. 6 DJIA: 12,845 “Follow the Money as It Exits Safe Havens“
Feb. 7 DJIA: 12,878 “Market Held Up By Sneaky Buying“
Feb. 8 DJIA: 12,883 “Is It Safe For Bulls to Come Out and Play?“
Feb. 9 DJIA: 12,890 “BIG Money Buying the Future“
Feb. 10 DJIA: 12,801 “Can a Greek Deal Be Accomplished Over the Weekend?“
Feb. 13 DJIA: 12,874 “Easy Does It! Some Selling Into Good News Expected“
Feb. 14 DJIA: 12,878 “Investors Should Expect “Market Churn”“
Feb. 15 DJIA: 12,780 “Market Churn to Include Brief Correction“
Feb. 16 DJIA: 12,904 “Another Snag in Greek Bailout + Long Weekend = Extended Correction“
Feb. 17 DJIA: 12,949 “Investors Establish Bullish Turf“
Feb. 21 DJIA: 12,965 “The Market’s Stall is Deceptive While Selected Issuers Could Hum“
Feb. 22 DJIA: 12,938 “Rotation of Strength: Continuing Opportunities as Market Averages Remain Sluggish“
Feb. 23 DJIA: 12,984 “Market Stall Masks Opportunities“
Feb. 24 DJIA: 12,982 “Speculators Hyping $4 Gasoline by Summer“
Feb. 27 DJIA: 12,981 “Stock Prices: “May the Force Be With You”“
Feb. 28 DJIA: 13,005 “Big Test for Bulls Today“
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.