Tuesday, February 28, 2012
Stock Market Commentary:
Italian Yields Fall, U.S. Economic Data Missed:
Stocks rallied on Tuesday after Italy sold a healthy amount of bonds at lower interest rates. U.S. economic data was mixed. It was discouraging to see that durable goods fell -4% in January 2012 which was the largest drop in three years. The S&P Case/Shiller index showed that home prices across much of the country fell -3.8% in Q4 2011 which brought home prices down to levels not seen since 2006. However, consumer confidence jumped to 70.8 from an upwardly revised 61.5 in the previous month. This easily topped the Street’s average estimate for a gain of 63.0. It is important to note that the consumer currently makes up 2/3 of the U.S. economy.
Market Outlook- Confirmed Rally
Risk assets (stocks, FX, and commodities) have been acting better since the latter half of December and are extended by any normal measure. At this point, all this means is that the odds for a pullback increase. However, markets can very easily go from overbought to extremely overbought so trade accordingly. 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!