Friday, May 17, 2013

Economic Journal - Friday, 5/17/2013

(As of 7:25 am PST)
 
Two positive economic reports are supporting buying this morning.  The preliminary reading of the University of Michigan/Thomson Reuters consumer sentiment index for May jumped to 83.7 from 76.4 in April, beating forecasts and surprising investors.  Secondly, a report on 10 leading economic indicators showed improvement in April, bouncing back 0.6% after falling in March.  The market seems strong today despite a back and forth week which included disappointing economic data and conversation about the winding down of the Fed’s bond-buying policies.   Events that would normally cause selling pressure were for the most part ignored this week as markets continued to drift higher.  Gold received a beating this week tumbling almost 5%.  The US dollar strengthened this morning to its strongest level in 3 years on speculation of QE coming to an end.  A strengthening dollar is bad for dollar-denominated commodities including gold.  Europe is looking strong today and most Asian markets finished up.  With May half over, the normal “sell in May, go away” adage may have to wait until next year, as the market eyes a fourth straight week of gains. 

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