Daily Investment Interpretations

July 28, 2010

2010-7-28:  The markets ended the day lower, with the NASDAQ Composite down 23.69 points (-1.04%) to finish at 2,264.56. The Dow lost 39.61 points (-0.38%) to close  at 10,497.88, and the S&P 500 fell 7.72 points (-0.69%) to end at 1,106.12. Oil ended at $76.77 a barrel, while Gold ended at $1,166 The VIX closed up at 24.26.
    Sam Stovall repeats his warnings about August and September as "down" months, and advises using them to buy stocks for the year-end rally: Stovall: Work on strategy, not your tan.
    Kleintop: It's a soft spot, not a trend echoes the ideas in Investor, Be Nimble. This latter article observes that corporate CEOs are much more confidant than is the average consumer, and that the mood among CEOs is a leading indicator, whereas the consumer confidence level is a lagging indicator. The latter article also points out that emerging markets are climbing rapidly.

-28 (Early Afternoon):
  In Earnings offer little clue to the future, Dr. Kellner presents a table giving his forecasts for this week's economic numbers. So far, they've held up tolerably well. For Monday, he predicted home sales up about 7%; they were actually up 23%. For Tuesday, he predicted consumer confidence at 50%; it was actually (and disappointingly) 50.1% rather than the widely expected 52%. For Wednesday, he predicted that durable goods orders would be up 0% vs. an expectation of +0.1%; they were actually down 0.1% (i. e., -0.1%). For Thursday, he expects jobless claims to be about the same as they were last quarter. For Friday, he anticipates 2nd quarter GDP growth to be 2.0% versus the consensus projection of 2.5%. (I suspect that a 2nd-quarter growth rate of 2.0%, if it should happen, would be a bombshell for the marketplace.) He also estimates the Chicago Purchasing Managers' Index down 1.6%  to 57.5% from the first quarter's level of 59.1%.
    So far, my investment advisory service considers today's tug-of-war to be expected, with dip buyers moving in to keep the indices from falling very far.
    This article, Market may break out of range with a sledgehammer, argues that the markets are holding up well in the presence of disappointments, and that it maysoon  break up to large gains.
    This article, Investor, Be Nimble, posits that corporate CEOs are bullish regarding the economy, and that now is the time to be positioned for a continuing recovery.  
    This article, U.S. stock market lingers lower after Fed report, advises that the Fed is less optimistic about the economy than it was in June, with growth stalled out in some areas of the country: Growth slows, stalls in some regions: Beige Book.