Apparently the market doesn’t care about growth anymore. Why should they, when the Fed is going to make sure that the market can never go down? This week the final revision for the Q1 GDP came out. It was abysmal at a -2.9%. Is everyone blind? They must be, or I’m just stupid.
This past week we had Markit flash PMI come out lower than expectations. Case Schiller home price index slowing growth in home prices. Durable goods orders going to a -1.0%. Weekly jobless claims slightly higher than expectations. Consumer spending cut in half from expectations. Along with this…Thursday one of the Fed Governor’s (Brussard) came out to say that the Fed is much closer to hitting its targets and raising interest rates sooner than we all think. The market tanked on that news. Then, as always the market reversed all those losses. Same on Friday, we were down early, and came back with the roaring of the bulls once more.
How many times can the bulls do this? It is a common theme every day. Each day, I think…yup, we finally got them…then the bulls pull themselves up by their bootstraps and charge forward again. Buy the dips…that is the theme for eternity. Market sell offs are now measured in minutes, not days/weeks/or months. I think the bears have been permanently castrated.
What else can be thrown at this market and it still keep fighting back? Even with fighting breaking out during a cease fire in the Ukraine, the market remains resilient. Even with ISIS in Iraq killing innocent people and continuing their fight to take over Iraq, the market remains resilient. Even with Obama sending troops (call them consultants all you want, they are trained elite military) to Iraq, with the possibility of being dragged into another war, the market remains resilient.
I’m beaten and bloodied, and fed up with this market. I have actually walked away from my computer a couple days this week. The reason being, I didn’t want to have an aneurysm with the pressure I have building inside. The one thing that scares me in the upcoming week, is that we generally have a bullish week prior to a holiday weekend.
We have a shortened week next week with the Independence holiday on Friday. That means the first week of the month, new money coming into the markets from fund managers, and more than likely an upward bias, barring any unforeseen circumstances. Of course, that circumstance would have to be earth shattering, since negative GDP growth cannot get the market to sell off.
Monday we have Chicago PMI (purchasing managers index) starting us off. They are looking for a lower number than last month.
Tuesday we have the ISM (institute for supply management). They are looking for a modest gain there of 0.2% over last month. Construction spending numbers will also be showcased. Those numbers are looking to be in a positive direction. It is understandable given that the pending home sales and existing home sales numbers last week were both better than expected. Interesting that my good friend in real estate just told me that things are really drying up in Orange County CA.
Wednesday we have the ADP employment numbers coming out for the beginning of July. Yes, half the year is gone already. With the ADP numbers we have the factory order numbers due to show contraction in the factories. That can’t be a good thing, but I’m sure the market will shake that off too.
Thursday we have our normal weekly jobless claims rising slightly to 314K in the estimate, or 2K higher than last week. Due to Friday’s market closure we have some very important numbers that would have normally come out Friday, come out one day early. Those numbers are the non farm payroll numbers, estimated to be 2K lower than last month, and the unemployment rate set to be flat at 6.3%.
Friday we can all celebrate our independence! Hooray! Market at new highs again! (sarcasm)