(as of 7:00 AM PST)
The month of February is starting out with volatility and emotion like that of January. Stocks were higher out of the gate, but rapidly gave back gains amid strong negative momentum spilling over from Friday's sharp drop. It seems that US consumers are not spending their excess dollars from lower gas prices as consumer spending decreased by .3% in December. Today's key piece of economic data, the ISM report, a measure of industrial activity in the US, showed continuing expansion with a 53.5 reading, but failed to meet analyst expectations and is a drag on all indexes. Oil continued to recover, hitting $50 p/barrel before falling back to the 49 level. Gold is down, giving back some of Friday's sharp gain. News from China did not help. The Chinese PMI, a measure of economic activity, slipped below 50, indicating that for the first time in years industrial activity is actually decreasing. Expect buyers to step in and stem today's losses. Economic data is stronger than investors are pricing into stocks at this point and further economic stimulus is right around the corner.
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