SUMMARY:
By now we should have a good read on the spring rebound in the economy. It’s impressive, but not robust.
Prior to last week’s surge, I felt the market had discounted a good (not great) spring rebound, with the S&P 500 rising 12.2% from February’s low.
We have gotten the spring rebound I was expecting, the question now is has the market over-discounted it ?
The temptation now is to go all-in, and that emotion is usually wrong, Selectivity is a better strategy along with some cash reserve to take advantage of the next correction.
Speculative appetites have been whetted, so we need to let the market tell us if last week’s breakout has legs.
Supporttoday id DJIA: 16,878; S&P 500: 1,944; Nasdaq Comp.: 4,306
Resistancetoday is DJIA: 17,015; S&P 500: 1,959; Nasdaq 4,341
Investor’s first read– Daily edge before the open
DJIA: 16,924
S&P 500: 1,949
Nasdaq Comp.: 4,321
Russell 2000: 1,165
Monday, June 9, 2014 9:15 a.m.
NOTE:
Two new monthly economic reports reflecting international activity appeared on my economic calendar this week (see below). The Global Composite PMI covers global manufacturing and services for countries, including U.S., Japan, Germany, France, China and UK (85% global GDP) and the Global Services PMI report covering the international service sector(80% global GDP).
. The Global PMI index rose in May to 54.3 from 52.8 in April; the Global Services index for May rose to 54.6 from 52.7 in April, both reflecting economic expansion here and abroad. Results are reported and included in my economic calendar each, my source is econoday.com. (site is well worth visiting).
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
HOUSING:
I began to track these housing stocks, hoping to gain some insight into the strength of the economic recovery emerging from a severe winter.
My reasoning was that a robust economic recovery cannot develop without a contribution from the housing sector.
The sector is stable with spikes up, but sellers are quick to enter to turn them down.
Inventories continue to drop along with falling mortgage rates, a combo that forces home prices upward, which should prompt a stampede to buy before available attractive homes are picked up. The problem , banks are not anxious to lend at such low rates and many buyers simply can’t qualify for mortgages.
Friday, all but BZH rebounded from consolidations on increased volume. This could be significant for a group that few think can gain traction. The stability in this group suggests a lot of negatives have been discounted in the stock’s prices. But, another spike upward suggests the Street still gives housing a chance of participating, possibly driving economic growth.
PARTIAL LIST :
Beazer Homes(BZH) $19.14
PulteCorp(PHM) : $20.13
Toll Brothers (TOL): $36.88
KB Homes(KBH): : $17.01
DR Horton(DHI) : $24.42
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
THIS WEEK’s ECONOMIC REPORTS:
For detailed analysis of both the U.S. and Foreign economies along with charts, go towww.mam.econoday.com. Also included is an explanation of each indicator. If you want to know when the next Employment report or any other key report will be released that info is also there under “event release date.”
TUESDAY:
NFIB Small Bus.Optimism Ix.(7:30)
ICSC Goldman Store Sales (7:45)
JOLTS (10:00)
WEDNESDAY:
MBA Purchase Apps (7:00)
Treasury Budget (2:00)
THURSDAY:
Jobless Claims (8:30)
Retail Sales (8:30)
Bus. Inventories (10:00)
FRIDAY:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
May 19 DJIA 16,491 Stock Market Getting Ready for a Move ?
May 20 DJIA 16,511 Bull Still Alive
May 21 DJIA 16,374 Market Needs Help from Fed and Economy
May 22 DJIA 16,533 Again – Stock Market Set for a Big Move
May 27 DJIA 16,606 Market to Key on Week’s Economic Reports
May 28 DJIA 16,675 Stock Market Needs a Catalyst
May 29 DJIA 16,663 European Monetary Ease June 5 – a Catalyst ?
May 30 DJIA 16,698 A “Teaser” Market Capable of Big Moves Either Way
June 2 DJIA 16,717 Decision Time for Stocks ?
June 3 DJIA 16,743 Economy “Must” Accelerate, or…
June 4 DJIA 16,722 Correction in Stocks Without Robust Economic Rebound
June 5 DJIA 16,737 Bulls Must Pick It Up, or Lose the Ball
June 6 DJIA 16,836 Easy Does It ! Dow 20,000, But Not in Straight Line
*Bloomberg
**Stock Trader’s Almanac
A Game-On Analysis, LLC publication
George Brooks
“Investor’s first read – a daily edge before the open”
Investor’s first read, is a Game-On Analysis,LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is 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. References to specific securities should not be construed as particularized investment advice or as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.
Read Next
