U.S. Stock Market Stuggles Against Economic Data
Yesterday, after losing its rally on the TARP plan, the stock market clawed its way to an overall gain at the close. It wasn’t a big gain, but it was a gain nonetheless. Today, the stock market continues its struggle against bad economic data:
- Even though jobless claims fell this past week, the month average is still at a two-decades high.
- Consumer spending remains down.
- Orders for U.S. goods fell in October.
- Oil futures are gaining on news of a Chinese rate cut.
- Pre-open results for many companies — especially retailers — showing a bleak picture.
- Dividends continue to fall as companies hoard cash.
So, the stock market is trying to tread water, instead bringing focus on two bright spots, in terms of stocks:
- The TARP plan aimed at boosting consumer spending (with the help of more available credit).
- President elect Barack Obama has named Paul Volcker, former Federal Reserve chair, as the head of his economic team.
Both of things are encouraging because it means that the future is pointing to a recovery — and maybe one that could take place in the relatively near future. So investors are trying to hold on. The news has been so bad for so long, that the stock market is trying to look for the light — especially ahead of the Thanksgiving holiday — and doing its best to eke out another day in the black.
At any rate, there is the possibility that expectations are so bad for this holiday shopping season that any improvement from retailers will be hailed as a success, and as good news. And, of course, there is likely to be a spike for discount retailers and dollar stores this holiday season. Cheap gifts are likely to be all the rage this year.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
