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Market Commentary The market is faced with several high profile data points Markets were again relatively quiet yesterday. Activity is certain to wane throughout the day as many begin to take year end vacations. Today the market is faced with several high profile data points including new home sales, weekly jobless claims, durable goods and personal spending/income. Will these data points influence trading? There was little market reaction to yesterday’s release of existing home sales which were nominally lower than expected. The 5.6% jump pushed sales to the highest level since June with 4.68 million existing homes sold on an annual basis. The pivotal inventory to sales ratio fell to 9.5 months from October’s 10.5 level. An I/S ratio of 5-6 months is viewed as healthy.
Perhaps an item of significance that gained little attention was the Philadelphia Fed President statement “if the growth rate of the economy continues to strengthen and looks sustainable, then I am going to be looking for the Fed to react to that….one way would begin stopping some of the purchases or slowing them down.”
While Plosser’s comment is only stating the obvious, it is apparent some members of the Committee are surprised by the strength of current statistics. Reiterating my long held view, I think growth will continue to surprise on the upside throughout 2011 as monetary velocity accelerates, the result of a more quantified tax policy and a least a moratorium of new regulations emanating from Washington.
Last night the foreign markets were mixed. London was up 0.15%, Paris down 0.44% and Frankfurt up 0.04%. Japan was down 0.23% and Hang Sang down 0.62%.
The Dow should open quiet. The 10-year is off 6/32 to yield 3.37%.
I would like to wish all a Merry Christmas and Happy Holidays.
The information is the personal views of Kent Engelke and is not necessarily indicative of those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed here are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. Capitol Securities Management, Inc. is a Mid-Atlantic based, privately owned brokerage and investment firm with branch offices in Mclean and Richmond, VA, Boston MA, Hickory, NC, Florham Park, NJ and Tampa, FL. Capitol employs over 170 fulltime investment professionals and independent affiliates in locations from New England to Florida and has been serving the needs of its investors for over 25 years. It is a member of FINRA and SIPC. © Copyright 2008 Capitol Securities, Inc. All Rights Reserved. |
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