Monday, April 02, 2012
Stock Market Commentary:
U.S. MFG Data Lifts Stocks:
Risk assets rallied on the first trading day of the second quarter after the latest round of economic data was mixed from across the globe. The official Chinese manufacturing data topped estimates but the HSBC manufacturing survey missed. U.S. mfg data also topped estimates which bodes well for the ongoing economic recovery. The ISM said its mfg index rose to 53.4 in March. However, not all the news was bullish. The Commerce Department said construction spending slid -1.1% in February which was the largest decline in 7-months and missed the Street’s estimate for a gain of +0.6%. The big miss came from Europe. The euro zone’s manufacturing sector fell for an eight month and at a faster pace in March which bodes poorly for the EU economy. It was also worrisome to see that the euro-zone’s unemployment rate vaulted to its highest level in almost 15 years! The fact that stocks rallied on the news bodes well for this rally and illustrates that the bulls are clearly in control at this point.
Market Outlook- Confirmed Rally
Risk assets (mainly stocks and a slew of commodities) jumped after a very shallow pullback, led higher by U.S. equities and agriculture commodities. This shallow pullback is considered healthy and shows how strong the bulls are at this point. However, if 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!