As days in Spain go, the last couple have been different. It has rained, and today it rained relatively hard for some time. Actually, when I don’t see rain for a while, when it does come, I find it relaxing and a bit comforting. So, when the rain came the hardest today, I put on a coat, walked up the street to my local pastisseria, had coffee and a bun of some sort, and sat outside on the covered patio to watch it come down. I have to tell you, it felt nice …
On the other hand, I don’t feel so good about the market. It is still hanging onto China as the latest bugaboo. Man, if it ain’t Europe, it is China, and when that plays out, the market will move right to the US for its handwringing, or somewhere else. I must sound emotional about the market, and maybe I am just a bit, but irrationality takes me to a place I just do not like to go.
Yes, China’s factory output slowed, but it does not mean the global economy is going into the tank. As I have said, it is to be expected. It is part of the plan. In fact, the market should be happy that China is slowing because the greater problem for China and the global economy is runaway inflation that destroys the emerging Chinese middle class.
Yes, the British government revised January’s retail sales number down and February’s was lower than expected. Yes, Eurozone manufacturing numbers were weak, but, hey, folks, things are changing over there now, not last month. Let’s look some weekly data, data less volatile than retail sales, and a much tighter snapshot of reality than month-old manufacturing data.
In the week ending March 17, the advance figure for seasonally adjusted initial claims was 348,000, a decrease of 5,000 from the previous week’s revised figure of 353,000. The 4-week moving average was 355,000, a decrease of 1,250 from the previous week’s revised average of 356,250.
This is a trend, and it seems to be a strong trend. If I had to put my finger on one of the most important indicators to pay attention to, it would be the trend of the weekly US unemployment numbers. If US folks are working, folks have more US dollars to spend. It is as simple as that. Week after week now for some time, more folks are working. If the US keeps getting stronger, the global economy will not suffer for it, that is certain.
Okay, so I am in a mood, and I don’t understand why. I felt pretty darn good this morning sitting on that patio in the rain, drinking my coffee, eating my pastry, and thinking about who knows what. Aha! That’s it. Coming back to the apartment, I have to start thinking about something, such as the market, and when I think about the irrationality of the market, I get in a mood. Am I repeating myself?
All right, let’s make this simple. Other than the trend in the unemployment numbers, none of the news today is really important. Nope, the market is simply looking for a way to shed some of the excessive pounds gained since October, because it fears getting too fat. I get it. This is what should happen after a rapid weight gain. Once a sense of control is reestablished, the next step is to get into a regimen to manage health and to put on weight sensibly and slowly …
The rain is over. It has been sunny and cloudless since I came home. Why do I wish it were still raining, and why do I wish I were back at the pastisseria drinking coffee and eating pastry?
Trade in the day – Invest in your life …
