In all the hubbub recently about the DIJA – will it rise or fall – a little known historical footnote got lost along the way. Actually, the market seems to have forgotten the financial sector, as it marched to new heights recently, and that is just not how it is done, according to history. One might want to turn his or her investor/trader feelers toward the financial sector, especially now as the market churns to find direction. True, the market might decide to head south, but so what? Use that as a buying opportunity to get into some value because the market is headed higher in the mid- and long term.
- Employers in all 50 states and the District of Columbia reported positive hiring plans for the second quarter, according to a survey of more than 18,000 companies by Manpower Inc. In addition, the share of employers anticipating having to cut staff, at 5 percent, was at the lowest since 2000.
- Retail Sales in the U.S. surprised to the upside with an increase of +1.1% in February. This was above the consensus estimate for a rise of +0.4% and a big improvement over the January’s revised (upward) level of +0.2% .Excluding the sale of autos, sales were higher by +1.0%.
Be aware, though, as the US economy heats up, this might well bring inflationary pressures as commodity and product prices increase.
- The government reported that Import Prices for the month of February rose by +1.1%, which was above the consensus for a reading of +0.5%. Export prices were up +0.8%, which was above expectations for an increase of +0.3%.
Although on the commodity front, I hear a growing rumble that oil prices could significantly drop because of the rise in American oil production and exports (the highest in 20 years) in conjunction with the continued heavy production from the Arabian Gulf states and Russia.
Back to the churning market … It seems the bulls are in disarray. They can’t quite close ranks to push that S&P 500 past its historic high. That might be changing, though.
- Investor’s Intelligence reports that Bullish Sentiment jumped on the week to 50.0% from 44.2% (46.3% two weeks ago).
- Bearish Sentiment fell to 18.8% from 21.1% (21.1% two weeks ago) and those expecting a correction increased to 31.2% from 34.7% (32.6% two weeks ago).
After all the noise fades, the market will have done what it wanted to do, no matter what the surveys said, the charts pointed to, or the pundits predicted. In the end, the market looks past the fear and hype, even if it temporarily goes down that path, and it moves up or down on the fundamentals. Right now, the US economic fundamentals and the corporate earnings are looking brighter than they have in a while, so expect the market to latch onto that, eventually.
Moving to a completely different place … I love science. Innovation, invention, and research fascinate me and in today’s world, those three things are happening more than they ever have in the history of the world. Given the state of computers and software, the pace of innovation, invention, and research is faster than ever, as well, and because of that, problems that at one time seemed unsolvable are fast becoming solvable. Take potable water, for example.
- A defense contractor better known for building jet fighters and lethal missiles says it has found a way to slash the amount of energy needed to remove salt from seawater, potentially making it vastly cheaper to produce clean water at a time when scarcity has become a global security issue.
Maybe there is a market angle to this in the future, but for now, it is just nice to know that folks out there are working at solving the problems of the world. I know, I know, my rose-colored glasses are out again.
Trade in the day; Invest in your life …
