Another Quiet Day On Wall Street
Wednesday, December 22, 2010
Stock Market Commentary:
The major US averages edged higher after the government revised Q3 GDP to +2.6% and existing home sales missed estimates. Keep in mind, that this is a shortened holiday week as all US markets will be closed on Friday in observance of Christmas. Market internals remain healthy, evidenced by an advancing advance/decline line and an expanding number of stocks reaching new 52-week highs.
GDP, ECB, & Housing Data:
The US government said third quarter GDP rose at a +2.6% annual rate. This topped some estimates for a +2.5% reading but fell short of the median estimate for a +2.8%. The Federal Reserve’s preferred inflation gauge, which excludes food and energy and tied to consumer spending, rose at a modest +0.5% pace for the slowest growth since records began in 1959. Elsewhere, sales of existing homes improved but remain slow. Existing home sales rose +5.6% last month to 4.68 million, which fell short of the Street’s estimates.
The European Central Bank will lend banks +149.5 billion euros ($196.8 billion) for three months to help them meet their liquidity needs over the year-end period. The ECB, which is based in Frankfurt, said 270 banks asked for assistance while which will be loaned at its average benchmark interest rate over the period. Tomorrow, a slew of European banks need to repay 96.9 billion euros in maturing 12-month loans and +38.2 billion euros in three-month loans on the Friday.
Market Action- Market In Confirmed Rally Week 17
It is encouraging to see the bulls show up in November and defend the 50 DMA lines for the major averages. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. Put simply, stocks are strong. Trade accordingly. If you are looking for specific high ranked ideas, please contact us for more information.
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