After two months of mostly beautiful weather here in Spain, the last two weeks have been consistently cool and fairly wet. Rain has come, which is rare for this time of the year according to the locals. The 10-day forecast is for more of the same. Nevertheless, my adventure continues no matter as my innate sense optimism most always wins the day, rain or not.
And that is the way I feel about the market, and maybe the market feels that way as well, even if it doesn’t always show it. Maybe you haven’t noticed, but the last three days the market has gone over to the green side. Silly me, of course you have noticed. It is your business to notice. The market hanging out on the green side in the midst of all the angst about Europe underpins my thinking it is optomistic about the near-term future.
Asian shares edged higher on Friday on firm U.S. data, but a two-notch downgrade of Spain’s credit rating capped gains.
Apparently, the Asian markets have a slight sense of optimism about things as well, although the spectre of Spain still floats about in the dim light. I hear talk again of the ECB stepping in, and I hear the ECB telling us not to expect much from the bank, but this is the language of politics, as Spain is not going down, and the affect of the downgrade is short term. I suspect the market understands this.
The other thing the market understands is when Amazon, the largest online retailer beats expectations, and the earning reports keep coming in mostly on the normal side of things, meaning, 70-80 percent of the companies come in ahead of expectations. The market likes to see profit and it likes to see sellers selling and Amazon is a seller selling.
GDP data is coming out pretty quickly, and that number will direct the market probably more than most things these days. The number will define economic direction in the mind of the market. Where we go from there is unknown, but if it actually rains after the GDP report, understand the sun is still there, even if you can’t see it behind the dark clouds.
Trade in the day; invest in your life. ..
