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Groundhog Snoozer: Dave's Daily

Stocks in this article: DOWXLBMRKXLVKXLPLNKDSOCL



Jobless Claims data was better than expected (367K vs previous 379K). Productivity (.7% vs. 1.9% previously) & Costs (1.2% vs -2.1% previously) was worse overall. Barely discussed, Challenger Job Cuts (53K January vs 41K December) were much worse and often this data will works its way into Friday's Employment Report.

Earnings overall were a mixed bag with early reports from Kellogg (K), Merck (MRK) and Macy's (M) being well-received while Dow Chemical (DOW), Abercrombie & Fitch (ANF) and Ryder (R) disappointed. (All featured in U.S. Sector, Stocks & Bond ETFs below with linked ETFs, XLP, XLV, XRT, XLB and IYT). Earnings overall are mixed and many firms are guiding lower which doesn't seem to dissuade stock market bulls.

With the Facebook announcement from Wednesday other social media stocks like Groupon (GRPN), LinkedIn LNKD) and Zynga (ZNGA) all rallied sharply which are constituents in GlobalX Social Media ETF (SOCL also featured below in U.S. Sector, Stocks & Bond ETFs). I don't know about you, but if I hear or see another Facebook story I'll probably hurl.

Bernanke gave House Budget testimony Thursday reinforcing the Fed view that the pace of economic recovery is "frustratingly slow". And, he regurgitated his understanding of the Fed's primary twin mandate: maintaining stable prices and maximum employment. What would be the grade I wonder? (Ok, nevermind!) He stated the obvious regarding the housing market troubles and low historic consumer confidence. The bright spot came from business where capital spending is increasing (maybe overseas) and multinationals continue to do well (think McDonalds).

Meanwhile Bernanke repeated his concerns regarding the eurozone but offered the ECB seems to be getting its act together for a solution. He further indicated the Fed was ready to spring into action to help whatever that means. The Greek Drama continues as we await word on their settlement with private bondholders which has been repeatedly extended. (EZU, GREK featured in Overseas Sectors & ETFs).

Gold prices continued to rise no matter a modest rally in the dollar. It does strike some as odd U.S. stocks can rally along with gold prices as noted by Kitco's Jon Nadler. But, if the Fed remains in ZIRP and/or QE for long all asset prices will inflate with the exception of single family homes. While Bernanke won't admit to this easy monetary policies should lead to inflation. More than anything, the Fed fears a protracted Japanese deflationary experience.  Crude oil prices fell on continued demand concerns while copper prices continued a recent decline. (USO, GLD, JJC are featured in Currency & Commodity Market ETFs below)

Stocks finished a seesaw session without much change although tech continues to lead the way higher overall. Volume was very light and breadth remains positive leading us to very overbought conditions on an intermediate-term basis (See McClellan Summation Index toward the end)

 

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SPY - The SPDR® S&P 500® ETF is a fund that, before expenses, generally corresponds to the price and yield performance of the S&P 500 Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
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IWM - The iShares Russell 2000 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the small capitalization sector of the U.S. equity market as represented by the Russell 2000 Index. The index represents the approximately 2,000 smallest companies in the Russell 3000 Index.
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QQQ - PowerShares Capital Management LLC is passionate about our goal of delivering the highest quality investment management available through one of the more benefit-rich investment vehicles ever created, the exchange-traded fund.PowerShares QQQ¿, formerly known as "QQQ" or the "NASDAQ- 100 Index Tracking Stock®", is an exchange-traded fund based on the Nasdaq-100 Index®. The Fund will, under most circumstances, consists of all of stocks in the Index. The Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The portfolio is rebalanced quarterly and reconstituted annually.
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