Dragging Economic Indicators Bring Down Trading
Posted On Thursday, February 25, 2010 at at 11:12 AM by Finance FanaticTrading shot downward right out of the gates on Thursday, as continually dragging economic indicators brought nerves back into investors. Currently, we are in one big tug-of-war. It seems like one day investors feel that the recovery is strengthening, so buy buy buy! Then the next day, we receive weakening data results and investors run for the hills. Somethings gotta give, and usually in these scenarios, it is the selling that wins out.
New orders for manufactured goods (excluding transportation), fell for the month of January, which was surprising to analysts. Orders fell .6% after a 2% increase in December. Analysts were expecting a 1% rise, but instead saw a negative number come across their desk. If that wasn't enough to disappoint them, jobless claims also rose this week, which was another thing they did not expect to see. Initial claims rose 22,000 to 496,000 last week, which was a big chunk greater than the expected 455,000.
What this is showing us is that, in reality, no one really knows what is happening with our economy. And how could we? The degree of measurability was thrown out the door as soon as the government shoved their trillions of dollars into the economy as well as participated, in what I believe, to be some strong market manipulation. So it is no wonder to me why economists can't figure out whats happening month to month. What we do know, is that anyone who thought this was going to be a quick turnaround, think again. In response to the weakening data announced today, Chris Low, a chief economist at FTN Financial in New York, said the following, "We can hope this is a temporary setback but it certainly looks as though in the first quarter...the economy is retrenching." That could be the understatement of this year.
Gold is benefiting greatly from today's uncertainty. Even with today's successes for gold, I do still feel it is much too early to benefit from inflationary measures. In fact, I feel that here in the short term, gold will continue to show weakness.
There is only so much pushing and pulling bull investors can take. Every time a day like today happens, it slowly begins to drain consumer confidence. This is evident in seeing that our most recent consumer confidence number was the worst in 10 months. Consumers are the number one drive for pushing this economy back up, and with weakening confidence, I do not see how that is possible at this point. Our president is much too concerned with his own agenda and that of getting a health care bill passed, which if he's not careful, could see this economy slip away from him once again. At any rate, not much movement from me at this point. Happy Trading
I’m sorry I just find it comical going back to your April 1st post where you were “Joking” About buying AIG, C, and GM and being a billionaire by July last year... When in fact if you did do that, even with GM completely collapsing and its stock losing all its value, Your portfolio would have bee up 43% by July/August. Go figure your april fools joke would have actually been the best investment to make! AIG gained 135% and C gained 95% From April 1st to August... For me, this does affect your credibility of your present and future comments
James,
Wouldn't a crystal be nice! For your information...although I may have not capitalized fully on the recent rebound in markets, I have hedged any losses, which is more to say than most out there, especially considering I recieved some of my largest gains in '07 and '08. Markets are behaving very unorthodox for the past year, and has surprised most analysts. This past year, there hasn't been that many people with "credibility"...bull or bear.
The economy is in a very slow recovery.
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