Wednesday, April 04, 2012
Stock Market Commentary:
EU Debt and Recession Woes Hurt Stocks:
Risk assets fell on Wednesday after investors digested a slew of economic data. Japan’s Nikkei experienced its largest single day decline in 5-months and gold fell by over 50pts. The European Central Bank (ECB) held rates steady and did not allude to further easing which echoed the Fed’s minutes released on Tuesday. Elsewhere, investors were also concerned that Spain’s debt auction was a little shy of estimates. Spain sold 2.6 billion euros of government bonds which was near the lower end of its target rate and yields rose compared to prior levels. This sparked fresh concern regarding other EU country’s and their debt woes. The news in the U.S. barely missed estimates. ADP, the country’s largest private payrolls report, said U.S. employers added 209,000 new jobs last month which was just shy of the Street’s 217,000 estimate. Separately, the ISM service index came in at 56 which was just below the Street’s estimate of 57.
Market Outlook- Confirmed Rally
Risk assets (mainly stocks and a slew of commodities) are pulling back again which is considered normal after such a strong move. The key going forward is to gauge the “health” of the pullback to see if it is just another mild pullback within a broader uptrend, or the beginning of something more serious. As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!