The short Thanksgiving trading week has been building to what is widely considered one of the larger holiday shopping weekends of the year. Some encouraging economic numbers wrapped up the main part of this week opening the potential for continued gains in the market.
The beginning of the week delivered some positive data out of the housing sector with a jump in existing home sales as reported by the National Association of Realtors. This kind of boost to housing data may work wonders to dispel some of the negativity and drag on the markets. This was followed up today with a Commerce Department report on new home sales that also showed a rebound. Of course, this data will have to stand the test of time when the tax credit runs out.1
Today also brought a report of a drop in jobless claims – to the lowest level in more than a year. This beat Briefing.com estimates that projected 500,000 new claims this week. This stands as a bright spot on the horizon for those analysts concerned over the potential for the job market to improve. However, one cannot forget that unemployment hit that 10 percent level as reported earlier this month.2 The Fed does appear to be more optimistic with regards to unemployment, forecasting a slightly better outlook compared to their sentiments in June.
Overall, a lot of positives coming out this week that may add fuel to continue to rally until year’s end. Unfortunately, all bets will be off after that. The US dollar is getting clobbered today and remains under pressure. The pledge within the meeting minutes from the Fed to continue keep rates low for now is likely a big contributor to that pressure. The US dollar appears the victim of the carry trade. That will also help put a floor under the market as equities look attractive to foreign investors. More than a few retailers are likely heading into the Black Friday sales stretch hoping to boost final quarter sales; however, it would not be surprising if sales fall short of holiday projections. The data may appear to be improving, but the economy is not out of the woods yet.
1 http://www.google.com/hostednews/afp/article/ALeqM5gRU48_Zs9mESkoqeP-muemuaUzvQ
2 http://money.cnn.com/2009/11/25/news/economy/initial_jobless_claims/
Past performance is not necessarily indicative of future results.
Past performance is not necessarily indicative of future results.
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