STOCK MARKET COMMENTARY:
FRIDAY, MAY 17, 2013
Stocks hit another record high last week as this Central Bank driven rally continues apace. We changed the status from rally under pressure to confirmed rally in our Tuesday 4/23/13 mid-week update and noted that the bulls are back in control of this market. So far, every pullback this year has been very shallow in both size (% decline) and scope (days, not weeks). As long as this healthy action continues we shall continue to err on the long side. At this point the market is getting extended and a pullback of some sort rises everyday as the S&P 500 keeps getting extended from its 50 DMA line.
MONDAY-WEDNESDAY’S ACTION: STOCKS CONTINUE TO RALLY
Stocks rallied for the 18th Tuesday this year after Wall Street titan David Tepper, co-founder of Appaloosa Management, said that he is still bullish on the market and likes the fact that the economy is still growing. in Europe, German investor confidence rose less than expected in May according to the ZEW Center for European Economic Research.In the US, Export prices, excluding agriculture, fell by -0.5% in April after falling -0.2% in March. Excluding oil, import prices slid by -0.2%, which follows last month’s decline of -0.2%.
Stocks opened lower on Wednesday as investors digested a slew of lackluster economic data from across the globe. The Eurozone economy shrank in Q1 by -0.2% which was the 6th consecutive quarter of negative growth and the longest recession since records began in 1995. In the US, the producer price index (PPI) fell -0.7% in April, posting the largest drop in three years which sparked deflation, not inflation, woes. Meanwhile, The New York Federal Reserve’s “Empire State” general business conditions index slid to -1.43 in May from 3.05 in April. Industrial Production fell -0.5% in April, missing expectations for a dip of -0.2%. On the bright side, home builder confidence topped estimates (43) and rose 3 points to 44 in May.
THURSDAY & FRIDAY’S ACTION: US DOLLAR RALLIES AS COMMODITIES FALL
MARKET OUTLOOK: CONFIRMED RALLY
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