Some days you just gotta laugh, but I will get to that in a moment. Right now, I want to look at today’s action in the market. It appears the market is now in a space to sell just to sell. My guess is that rebalancing is in order and any “bad” news, real or otherwise, is justification for selling.
- Service industries in the U.S. expanded at a slower pace than forecast in December as orders contracted for the first time since 2009, showing uneven progress in the biggest part of the economy.
- The Institute for Supply Management’s non-manufacturing index decreased to a six-month low of 53 in December from 53.9 in the prior month.
Okay, so how bad is this?
- The ISM (Institute of Supply Management) Non-Manufacturing index for December was a bit of a disappointment. However, the index shows the services sector of the economy did continue to expand for a 48th consecutive month.
Continuing to expand is a good thing, right? As well, consider the other side of the coin …
- Markit’s U.S. Services PMI (Purchaser Managers Index) for December was reported at 55.7. The New Business component was reported at 57.9, which was up from the 56.9 reading in November.
The other good news that came out today slipped under the current of “not so good” news that is floating by today. Consider employment and the cost of living.
- The Employment component came in at 55.2, up nicely from the 52.4 level seen last month.
- Finally, inflation remains in check as the Prices Changed index was 54.5 vs. 55.0 last month.
So here is where I tell you about my laugh this morning. You know I always rail about how the news is sold, about how it sensationalizes. Well, the first piece I read this morning had a phrase in it that made me laugh.
- Figures showing that China’s services sector slowed sharply last month added to a stack of disappointing data from the world’s second largest economy over the last week.
True, last week, China’s factory output slowed a bit, but the economy is still growing hugely. What happened in China last week is hardly a “stack of disappointing data.” Nevertheless, one cannot argue with the market. It is what it is and the “is” is all about rebalancing. Not to worry, though, lagging indicators do not a trend make, at least not yet. The fundamentals are still in place in the US and China and they are starting to line up in Europe.
- Service industry growth slowed sharply in China in December but picked up across most of Europe.
Aside from the above, businesses are feeling better about everything and it appears business spending will increase because of that good feeling.
- Worldwide IT spending will grow by 3.1 percent to $3.8 trillion this year after a broadly flat 2013 and will be driven by businesses starting to harness ‘big data’ garnered from smartphones and other devices.
Speaking of smartphones, which I have been doing much of lately, consider what exposure to 150 million new customers will look like for a company offering good product, but unable to deliver in so many places.
- T-Mobile US said it would buy spectrum licenses from Verizon Wireless for about $2.4 billion in cash to improve its high-speed wireless services in the United States
It is a good deal for both companies, as Verizon gets heaps of cash with little threat and T-Mobile gets a chance to peddle its “unlimited” data services to a huge slice of the market.
Finally, I put up some information recently about AMD. This beaten down and almost forgotten big player might just stage a comeback on the backs of the really big boys and their gaming pursuits.
- AMD has been on a winning streak lately with a strong launch of new gaming consoles from Microsoft and Sony, a successful refresh of consumer graphics cards and two slots in the new release of Apple’s (AAPL) Mac Pro featuring two of AMD’s professional Radeon graphics cards per unit.
Currently, the price is over $4, which is a big improvement from where I mentioned it a week or so ago ($3.40).
Trade in the day; Invest in your life …
