Tuesday, March 13, 2012
Stock Market Commentary:
Healthy News From Europe & The U.S., Fed Stays Firm:
Before Tuesday’s open, Germany said its ZEW survey for March, which measures economic expectations, surged to 22.3 which easily topped the Street’s estimate for 10. The U.K.’s trade deficit widened slightly but still came in short of estimates for January. The real surprise was that exports to non-European Union countries rose to the highest level in history! Investors were also comforted when euro-zone finance ministers discussed the authorization of the first tranche of Greece’s second bailout which helped allay fears of further complications.
On average economic data in the U.S. was also stronger than expected. The warmer weather across the nation helped retail sales jump to the fastest rate in five months in February. Retail sales rose +1.1% from January which matched expectations. Meanwhile, the National Federation of Independent Business’ small-business optimism index increased for the sixth consecutive month to the highest level since December 2007! A separate report showed that business inventories rose by 0.7% which was the largest increase since October. Finally, the Fed concluded its latest meeting, held rates steady and largely reiterated their recently stated cautious but optimistic stance regarding the economy.
Market Outlook- Confirmed Rally
After a very shallow pullback the majority of risk assets (stocks, FX, and commodities) have began to rally after a normal pullback. So far this action is considered healthy. However, if the sellers show up and support is breached then the bears will have regained control of this market. 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!