INSIGHTS
SEP
24
WEEK AHEAD...
The summer has finally ended and the big question on everyone’s mind will be has the rally in US equities ended with it? Manufacturing helped fuel the rally early on and housing data came in and confirmed it. These two leading components of the U.S. economy were long overdue to begin to strengthen. Without both sectors showing some strength, no recovery can continue and what we saw towards the end of last week was some investor concern about manufacturing’s ability to strengthen.
Some negative comments from FedEx also put a damper on the week’s action.
This week we will be watching to see what the durable goods orders look like and data on personal income and spending. One indicator I do like and do feel that it has significance is Consumer Confidence on Tuesday. I believe we will see a slightly higher number than the consensus number because there have been some fairly positive reports over the last 6 weeks and consumers may be feeling the effects of those stronger numbers. Housing, auto sales and a slightly improving job picture.
Conditions in Europe and a slight slowing down in China most likely will not affect the consumer just yet. Give it six months and this number may be significantly different.
The market some seers feel will have a slight correction going forward. Possibly 2 to 4 %. I don’t think that that is out of the realm of possibility but we may have to wait for that because I think we may be seeing the retail investor coming back into the market. Some research will have to be done and it is more of a gut feeling but I think that shift is underway.
Why do I feel this way?
Generally, retail investors go into the market; when they have confidence in the market; when they have confidence in their earnings prospects; when they feel the market is leaving them in the dust.
A rising market inspires confidence in the economy and in the market itself. Consumer confidence and sentiment have both been on an upswing.
This market has risen 14% this year and the retail investor has not been involved.
Once the retail investor gets back into a market it is very near the high. I think we are nearing that point. I also think that the retail investor can add some false strength to the market and allow it to reach a new high but it’s at that point its best to get out. Although a 2 to 4 % pullback is not that significant, its very possible that we could see a correction at some point in the next two months and corrections are a lot more severe.
Some negative comments from FedEx also put a damper on the week’s action.
This week we will be watching to see what the durable goods orders look like and data on personal income and spending. One indicator I do like and do feel that it has significance is Consumer Confidence on Tuesday. I believe we will see a slightly higher number than the consensus number because there have been some fairly positive reports over the last 6 weeks and consumers may be feeling the effects of those stronger numbers. Housing, auto sales and a slightly improving job picture.
Conditions in Europe and a slight slowing down in China most likely will not affect the consumer just yet. Give it six months and this number may be significantly different.
The market some seers feel will have a slight correction going forward. Possibly 2 to 4 %. I don’t think that that is out of the realm of possibility but we may have to wait for that because I think we may be seeing the retail investor coming back into the market. Some research will have to be done and it is more of a gut feeling but I think that shift is underway.
Why do I feel this way?
Generally, retail investors go into the market; when they have confidence in the market; when they have confidence in their earnings prospects; when they feel the market is leaving them in the dust.
A rising market inspires confidence in the economy and in the market itself. Consumer confidence and sentiment have both been on an upswing.
This market has risen 14% this year and the retail investor has not been involved.
Once the retail investor gets back into a market it is very near the high. I think we are nearing that point. I also think that the retail investor can add some false strength to the market and allow it to reach a new high but it’s at that point its best to get out. Although a 2 to 4 % pullback is not that significant, its very possible that we could see a correction at some point in the next two months and corrections are a lot more severe.