MONDAY-WEDNESDAY’S ACTION: STOCKS Are Strong
Stocks ended higher on Monday as investors digest the latest round of economic and earnings data. Overnight, China said its economy matched estimates and grew 7.5% in Q2. In the U.S., retail sales rose by 0.4% in June which was half of the Street’s estimate for a gain of 0.8%. On a more positive note, the NY Federal Reserve’s manufacturing index rose to 9.46 in July from 7.84 in June and topped the Street’s forecast for 5.
The S&P 500 and Dow Jones Industrial Average hit new all-time highs on Thursday after investors digested the latest round of economic and earnings data. Bernanke finished his two day testimony on Capitol Hill and reassured investors that the Fed did not have a concrete timetable to taper QE. Weekly jobless claims fell by 24k to a seasonally adjusted 334k, beating estimates for 345k. The Philly Fed index jumped to 19.8 in July vs 12.5 in June, also topping estimates. Finally, Leading Indicators were unchanged at 95.3 in June, hovering near a 5-year high. Stocks were relatively quiet on Friday after Google (GOOG) and Microsoft (MSFT) reported lousy quarterly results.
MARKET OUTLOOK: Stocks Hit New Record Highs
The Fed induced rally is alive and well after Bernanke did a 180 and shifted the narrative back to a world of infinite Fed money. Our goal is to remain in sync with the broader trend of the market (up or down) and not get caught up with the minutiae of changing labels on the market status very often. As always, keep your losses small and never argue with the tape.