(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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