On a day when drama is not moving the market, good news spills through with little impact. I suspect the economic news today is, in one sense, too little too late, at least too late for this year. If the good economic news trend continues into 2012, then those investors shivering under their blankets might peek out, look around, smell the rich coffee, and then reach under their mattress to grab some of that cash earning nothing. In any case, let me jump the good news of the day to the top, as it deserves it.
- US current account deficit falls to $110.3 billion, lowest level since end of 2009.
- Unemployment benefit applications fall to 366,000, lowest level in more than 3 years.
- Wholesale prices up modestly in November; inflation still looks tame.
- Spain saw solid demand for its bonds on Thursday, paying more than 2 percentage points less to borrow over 5-years.
- The preliminary readings for Europe’s services and manufacturing PMIs came in stronger-than-expected.
- The Federal Reserve Bank of New York’s general economic index accelerated to the highest level in seven months to 9.5 from 0.6 in November.
- The Federal Reserve Bank of Philadelphia’s general economic index increased to 10.3 in December from 3.6 last month.
- The VIX is remaining in the mid-twenties.
As good as this economic news is, the market is not impressed, or should I say traders are not impressed. As I write, the market is trending lower, considerably off the highs of the opening. I would not be surprised if the market actually closed in the red or close to flat today. Then again, the market is full of surprises.
Another year is winding down, and I must admit that as the years roll by, each year seems to roll faster. It seems as if it were just yesterday that the predictions for 2011 were pouring in from the prognosticators. Well, get ready because the doors to that world will be opening again soon enough, and my guess is that doom and gloom will dominate the headlines.
Yes, European debt, European economic contraction, the U.S. election, and the U.S. debt debate will dominate the downside. As to the upside? I suspect that will be limited, unless, of course, the U.S. consumer and the global consumer go back to work and start spending money again. If that happens, those investors hiding under their blankets could cast them off and rush back into the arms of a patiently waiting market.
Trade in the day – Invest in your life …
