The week ends and we see records dropping in most of the major indices. The narrowly averted disaster in Washington is being credited with the rally but we believe it is a little deeper than that.
As we have previously discussed, the market never truly believed that there wouldn’t be some sort of short-term resolution. If it had, we would have seen a major sell-off and we would be rallying from a much lower place. It was skittish but never truly accepted that it was going to happen so our rally now is not Debt Ceiling related but market dynamics related. Those market dynamics have been in play for months and will continue to move all averages higher.

Market Dynamics you ask? The triple treat of fairly strong earnings, consistently low interest rates, and the lack of any better place to put money has kept this market afloat and why shouldn’t those treats keep the market going higher? That’s what investors love. No point in beating that to death anymore, we move forward.

Now that some of the uncertainty is removed from Washington we can refocus on what the World has been waiting for, Data, and more Data.
Jobs reports, Import and Export prices, PMI, Durable Goods and Consumer Sentiment. Lots to look at but in reality, we probably didn’t miss much and its more about trends and what the Federal Reserve will make of those trends.

It will be an exciting week for the Data Geeks and we expect a continuation of the most recent trends with no hiccups, just yet.

The onset of the Christmas selling season will bring a lot of forecasters out of the woodwork and who are we to leave an opportunity for giving out our opinion so here goes: It won’t be good, even though the economy is getting better, people won’t be going overboard on Holiday shopping because they have already taken on enough debt and won’t want to expand that as much as retailers would hope for.
Look for big sales early this year.