First, let me say that yesterday was a good day for the market. It needs a bit of a breather, some rebalancing. What we don’t need, but we have it and always will, is the lame analysis given us in the breathless media.
- A down day for stocks Monday, sparked by the disappointing start in holiday sales.
Okay, had the writer taken the time to actually research his/her thesis, he/she would have also noted that although brick-and-mortar store sales were down, actual “holiday” purchases were up, and online sales were up hugely.
- Black Friday shopping at brick-and-mortar stores in the United States was down about 7 percent from a year ago, according to ShopperTrak, but more purchases on Thanksgiving Day nearly made up the difference. Meanwhile, online retailers recorded double-digit year-on-year increases in sales.
Facts are facts and it is a shame that the breathless media feels compelled to misshape the facts to fit a business agenda. The fact here is that the retail season so far is quite robust and it promises to get even more robust.
- Manufacturing orders over the past four months have been the strongest in a decade as growing demand from American clients makes up for any letdown among foreign customers.
The lull in European and Asian markets does not seem to be affecting the output of American manufacturers, as the US consumer picks up the slack. Again, one big reason is the US consumer has more money in their pocket.
- Crude futures rose more than 4% to settle at $69 a barrel. The rally in oil leaked over to other commodities. Gold futures reclaimed the $1200 mark for the first time in more than a year.
True, oil and gold both had a bit of a good run yesterday, but today that rune appears over. Oil is dropping and gold is as well. The question is, though, why did they go up? There is no fundamental reason for either to go up. Me thinks speculation that yesterday’s report on brick-and-mortar store retail sales suggesting the US consumer is out of the game and, thus, the US economy will slide backward toward recession is the reason.
Again, facts are facts and here is one that supports my continuing thesis that the US economy is not faltering; in fact, it is turning the corner to a major resurgence, a boom period not seen since the late 1950s and 1960s. Check out this headline.
Eurozone Companies Come Home as Asian Costs Rise
I have been writing about this for some time. I suggested that as the Asian economies began to develop their middle classes, wages would rise and that would mean that the era of cheap Asian labor would come to an end. Well, folks, that is happening as I write today.
- After years of moving production to Asia, some European companies are following the example of their U.S. counterparts and coming home.
Now, US and European companies coming means may positive things, but one big one is that it means more jobs for the folks where the factories are located. Yup! More means, more money in the respective economies.
Anyway, the market today does not feel the need to follow up on yesterday’s drop, even if I think it wouldn’t hurt. Well, it is what it is and if it remains up today, that is no big deal either, in the longer term. In the nearer term, well, we should expect that at some point after the new year begins, we will see a slight correction, just to balance things out as we move along toward greater prosperity.
Trade in the day; invest in your life …
