Stocks meandered today after better than expected data failed to give buyers a reason to send stocks up substantially. The market has entered a lull the last few sessions as the recent move in stocks has priced in some very optimistic outcomes for the jobs market and the upcoming earnings season. Investors are now looking for the next catalyst to send stocks higher. Without a new catalyst, we could see a series of sell the news events in the coming weeks.
As has been the case of late, today’s small gains were characterized by very low volume. Breadth was even for most of the session. Buyers have slowly crept back into the market in recent weeks as there appear to be little to no reason to fear risk assets at this juncture. In addition, the end of the quarter has led to portfolio manager’s reaching for performance. Whether this quiet creep higher will continue into Q2 remains to be seen, but the market appears awfully complacent here and vulnerable to downside surprises.
From Daily Futures:
U.S. Economy
The Standard and Poors/Case-Shiller index of home prices in twenty cities was down .4% in January (unadjusted) and down .7% from a year ago, roughly as expected.
The Conference Board’s index of consumer confidence jumped up from 46.4 to 52.5 in March, better than expected.
Grains and Cotton
May corn is steady to lower ahead of tomorrow morning’s prospective plantings report from the USDA.
May soybeans are steady while dockworkers in Argentina are on strike.
Livestock
Hog prices are still benefitting from Friday’s positive hog inventory report. June hogs are trading higher after closing up limit yesterday.
Currencies
The U.K.’s Office for National Statistics said that real GDP was up .4% in the fourth quarter of 2009 and down 3.1% from a year ago, better than expected. For all of 2009, GDP was down 4.9%, the largest fall on record. The June British pound is trading higher.
Japan’s unemployment rate was unchanged in February, at 4.9% while industrial production was down .9%, weaker than expected. Also, household spending was down .5% in February, the first drop in seven months. The June yen is steady to lower.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.