This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Shares Won't Shine Until the Sun Does

NEW YORK (The Street) --- A bad U.S. winter is weighing on share market sentiment, skewing economic data so investors struggle to gauge the true strength of the domestic economy.

This means an absence of clear catalysts to push the market higher before spring, fund managers said, pointing to the wind-down of earnings season, a delay of the debt ceiling, and a smooth transition from Ben Bernanke to new Federal Reserve chief Janet Yellen.

The S&P 500 lost more than 5% last month, and even with its February bounce, is still lower for the year. Traders point to weak participation by the Dow Jones Industrial Average in the recent rebound, while small-cap stocks -- a bellwether for risk appetite -- only marginally outperformed the broader market.

More broadly, other indicators of renewed caution include a weakening yen, a softer Aussie dollar and a stronger gold price.

Now, after a 26% gain for the S&P 500 last year, fund managers said a sustained period of solid economic data will be needed to underpin further gains.

"We'd need to see a bounce-back in the manufacturing ISM to show the last result was an anomaly and if we continue to see M&A activity over the next few months - companies putting money to work -- it could help," Greenwood Capital chief investment officer Walter Todd told TheStreet. The firm manages $950 million in capital.

Todd still thinks the broader market will move higher through the year, based on his estimation of 3% to 3.5% GDP growth and better earnings. The fund manager views the wind-back of stimulus as a positive for the market as it enables investors to focus on company fundamentals rather than macroeconomic decisions.

Capital Advisors investment manager Channing Smith agreed. "It will be interesting over the next few weeks as (the weather factor) fades to see if data has been impacted or if there's a genuine slowdown," he said.

"Earnings have been OK but economic data has been mixed and looks like it will continue to be mixed."

Smith said investors would continue to weigh developments in emerging markets that shook world equities early in the year, along with Chinese growth and political developments in Italy. Capital Advisors oversees $1.3 billion in funds.

Domestically, the fund manager agreed with peers that bad weather represented a "get out of jail free" card for any poor economic data until the return of warmer days.


-- By Jane Searle in New York

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $126.35 2.50%
FB $83.18 -0.14%
GOOG $551.83 0.64%
TSLA $193.50 4.60%
YHOO $44.95 -0.33%


DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.02 +25.00 1.21%
NASDAQ 4,946.40 +55.1810 1.13%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs