Thursday, April 19, 2012

Thusday Market Recap

Today saw the market continue it's short-term sell-off driven by a bevy of poor economic numbers and more news out of Europe.

Economic Numbers
  • The March Philly Fed Business Outlook reading fell to 8.5 from 12.5 and below the estimate of 10.3. New Orders and Shipments also dropped from the prior month.
  • March Existing Home Sales fell to 4.48 million, below the estimate of 4.62 million
  • Weekly Initial Jobless Claims increased yet again to 386k, well above the estimate of 365k; last week revised to 388k from 380k; continuing claims jumped 26k to 3.27m

Europe Again

  • Yields on Spanish bonds continued their ascent higher
  • French yields also rose on rumors of a potential downgrade
  • The Spanish stock index, the IBEX 35, broke below 7100 at one point for the first time since March 2009

In Perspective

  • Putting everything that occurred this week and the last month into perspective is the only way for 99% of investors to succeed. Keep in mind the S&P 500 is less than 3% from a 4-year high and this has been in the face on continually negative news out of Europe.
  • Earnings have not been blockbuster, but they are definitely good and that is one major reason the market has not fallen harder on the European news.
  • Valuations based on no growth to modest growth this year for the S&P 500 has the market undervalued. If you want to be in the market in the next 10 years, you want to be in the market now!!

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