Economic Journal - Friday, 8/29/2014

(as of 7:00 AM PST)

 

Inputs from both geopolitical events and economic data are influencing markets in what should be a very quiet day since most traders are taking the day off for the long holiday weekend.  In news of note, Russia appears to be sending troops and artillery into eastern Ukraine.  What would normally invoke a sharp decline in markets and a flight to safety for investors, now is resulting in tired yawns as traders have numbed to what seems old news.  It seems Russia is applying a strategy that reminds us of the parable of the frog who sits in a pan of water and while the heat is turned up gradually he calmly sits not knowing that he is being slowly boiled to death.  Come Tuesday, we make awake to a new order in Eastern Europe.  On the economic side, Chicago PMI, a key measure of economic activity, was sharply higher, another indication that our economic recovery is picking up speed.  Oil is higher on the international tensions while gold is near flat, very unusual given those same worries. Expect very muted action today while Tuesday activity could be very volatile.

 

Have a great weekend!

Economic Journal - Thursday, 8/28/2014

(As of 7:20 am PST)

 

US stocks are lower in early action as worries over renewed tensions in the Russia-Ukraine conflict overshadowed positive economic data at home.  News that Russian forces had entered and taken control of a coastal town in Ukraine sent markets lower right at the open.  Positive US economic data wasn’t enough to lift stocks but is worth noting. The second estimate of US GDP showed 4.2% growth in the second quarter, a strong reading and well ahead of estimates of 3.9%.  Jobless claims also beat estimates with last week’s claims dropping to 298,000. Most major global indexes are down on the Russia-Ukraine news with Asian markets closing in the red, and European markets firmly lower as well. Gold and oil are higher while interest rates took a dive on a “flight to safety.”  After three straight days of gains it looks like today we could be in for some profit-taking.

Economic Journal - Wednesday, 8/27/2014

(As of 7:15 am PST)

Stocks opened flat this morning, with the major benchmarks see-sawing around the unchanged line a day after the S&P500 closed above 2,000 for the first time. With very little economic data to trade on today investors are turning to earnings reports.  Tiffany & Co. reported an earnings beat in the second quarter while also lifting its full year earnings forecast.  Arts and Crafts retailer Michael’s jumped 8% after reporting better-than-expected earnings, while retailer Express Inc. surged 12% surprising investors with its outlook.  In overseas action, Asian markets finished the day mostly higher, while European stocks have fallen back to the unchanged line after Wall Street’s open.  Gold and other precious metals are down slightly while oil is inching higher ahead of an inventory report. It looks like a quiet day is shaping up as investors catch their breath after a remarkable August rally. ‘Where do we go from here?’ is the question on everybody’s mind.

Economic Journal - Tuesday, 8/26/2014

(as of 7:15 AM PST)

 

The often misread durable goods orders report provided a brief lift to the market to start the morning action.  A whopping increase of 22% was overwhelmingly the result of a batch of new jet orders for Boeing from the Paris airshow.  Extracting the huge aircraft orders number, the durable goods were down .8%, a rather weak showing.  All in all it was a wash since the previous month report was adjusted upward by 1%.  Trading volume is very light this week and momentum continues to point upward for the traders who are not on vacation.  Consumer confidence is at a high not seen since 2007 and is adding to investor enthusiasm.  It looks like another good day ahead as the economic recovery picks up speed. Gold and oil are both up moderately while interest rates are stable.

Economic Journal - Monday, 8/25/2014

(as of 7:00 AM PST)

Markets are on a roll, extending last weeks gains at the opening this morning.  Positive news from Europe is a big driver with European markets up nearly 1%.  There is not much economic data to report.  Thoughts that the Federal Reserve Bank and other central banks around the globe will continue easy money policies seems to be driving the positive momentum.  Gold and oil are slightly negative, but near unchanged.  Interest rates have come down again with the 10 year yield on Treasuries reaching a near record low.  The last week of August is usually very quiet with many traders on vacation.  

Economic Journal - Friday, 8/22/2014

(As of 7:20 am PST)

It’s all about the Fed today.  With little economic data to report on, investors will be keying in on Federal Reserve Chairwoman Janet Yellen’s speech at the annual Fed meeting in Jackson Hole.  After Wednesday’s release of some rather ‘hawkish’ FOMC meeting minutes, investors are anxious to hear what Yellen says about the Fed’s plan to raise interest rates.  At 10 am EST Yellen hit the mic, and right off the bat indicated that the economy is getting closer to the Fed’s main objectives.  She emphasized the debate is shifting to when the Fed will raise rates, reminding the market that the rise could come sooner than later.  Stocks began the day lower in anticipation of Yellen’s speech, but are now see-sawing near the unchanged line.  International markets are mixed with Asian stocks finishing the week on a positive note while European stocks were hit on renewed tensions between Russia and Ukraine.  The market has had a great run this week and looks to finish the week with solid gains.