Spanish young people out of work (50% or so) joined forces with labor group members to disrupt commerce throughout the country. It is a big deal on the news. My suspicion, however, is people with jobs are not particularly supporting the strike and the government of President Rajoy will not back off the reforms he calls “unstoppable” because Spain is economically tethered to the EU and the new political EU accord demands that Spain reduce its budget deficit to 5.3% of GDP this coming year. This is a stark reality for a country used to secure, long-term work contracts, contracts in the cross hairs of the conservatives in power. Sound familiar?
Consumer spending in February increased by the most in seven months even as income rose modestly … While the government’s final estimate left growth in gross domestic product at an unrevised 3 percent pace last quarter, when measured from the income side, the economy expanded at a solid 4.4 percent rate – the quickest since the first quarter of 2010.
Now, that is relevant economic data, as seen in the market’s initial positive response. Of course, when the day’s buying and selling is done, we will truly know if the market cares about this critical data, or if it is still only interested in just reading the train schedule. It might not be enough yet to convince the market the economic momentum is sustainable. We will see …
Part of my reading every day is the opinions of professional market players from all quarters. I find this particularly interesting because of the divergent views among the folks whose job is to make money in the market. Right now, today, you can find professionals who will tell you the market is headed south and others who say get your money in now. This polar reality is what makes markets. There is a lesson in this for individual traders – sometimes you are right and sometimes you are wrong. The goal is to be more right than wrong. Here is another lesson in the form of a professional giving his view about the market and a comment from a person I believe of sound mind and judgment based solely on his response to the commentary below.
The market has been dysfunctional since January. Aside from the narrow leadership of Tech (XLK), Discretionary (XLY), and Financials (XLF), most of the sectors have been subsiding and resting for the last two months.
Okay, it sounds reasonable, but is it reasonable for a professional market player to describe the market as dysfunctional. Can the market be dysfunctional? Well, here is what one reader thinks about the comment. Pay close attention, as it makes a whole lot of sense.
Not behaving the way you expect doesn’t mean dysfunction. It means you don’t understand. If you pick the right stocks, it’s very functional.
I just love the direct simplicity of this, and I think the fella is right on target. The market is always functional – it does what it does when it does it. The market does not follow any preset parameters. There is no definable behavior for any specific condition. It constantly behaves according to its sensibility in the specific and in the general. Suggesting or thinking otherwise is a mistake.
Thus, making it all work means ascertaining the market’s sensibility at any given specific moment (day traders) or in the most general sense (long investors). This is what I try to do and then write about it. What is the market believing today or in general? The answer is never easy or straightforward, but I am finding I am more right than wrong these days.
Trade in the day – Invest in your life …
