Today was fairly choppy trading day, but nonetheless, it was good to see the market continue yesterday’s strong rally. Something to watch closely is the bond market, which is the stock market’s main competitor. The bond market has led this precipitous decline the last 6 months amidst many failed attempts by equities to rally. Today we saw a huge decline in bonds (price down, yield up) and it will be interesting to see where the trend goes from here. Maybe we also made a bottom in the bond market yesterday. Just something to watch.
On the economic front, the housing data wasn’t great, but the expectations are so low, this information doesn’t really move the market anymore. The median home price in 2007 declined for the first time since the 1930’s (reference Bloomberg.com). Also, initial jobless claims came in above analysts’ expectations, so this could be a good sign for the employment number next week.
Also, there was an announcement from the White House discussing their proposed stimulus package. They said the refund would be $600-1200 and this gave a little boost to the market (reference finance.yahoo.com). This refund should benefit retailers the most because with interest rates so low, people will probably spend their money instead of putting it in the bank.
After the bell, Microsoft reported strong numbers and the stock was up about 5% in after hours trading. Expect the market to open higher tomorrow morning and for a strong showing from tech and the NASDAQ. There is no economic data being reported tomorrow. Be sure to watch earnings tomorrow from CAT, Harley-Davidson, and Honeywell.
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