I wish I had something unique to report, but we all pretty much know the routine by now. The stock market opened on time and promptly proceeded to do the only thing it pretty much ever does – gut and kill bears. Today’s move was particularly insulting to equity market bears as stocks dipped to morning lows of -1.5% before the 10:30 buying crew stepped in 45 minutes early and didn’t stop all day. Stocks ultimately finished with gains – most impressive.
This has become a truly breathtaking market that simply cannot be stopped. The stats are well known by now. Stocks rise on 80% of all days, Mondays are always up days, the 10:30 decline is guaranteed money, declines are brief if at all and risk appetite is off the charts. My favorite stat of the day:
- Housing stocks are up 11% in 4 sessions and up 29% in the last 8 weeks. Wow.
A slew of negative news could have taken the market lower this morning, but stocks shrugged off Greek debt worries, lower overseas stocks, weak earnings and higher than expected PPI.
There is an almost unstoppable bid under this market and the appetite for risk is so high that it almost feels like greed amok. Nonetheless, the trend remains very friendly and the “buy the dip” mentality is alive and well.
From Daily Futures:
The U.S. Labor Department said that jobless claims were down 24,000 last week to 456,000, roughly as expected. They also said that the producer price index was up .7% in March and up 6.0% from a year ago, more than expected. The June 2011 eurodollars were down .04 to 98.52.
The National Association of Realtors said that existing home sales were at an annual rate of 5.35 million in March, up 6.8% on the month and more than expected. July lumber fell $3.30 to $333.50.
Grains and Cotton
Compared to the latest four-week average, the USDA said that last week’s net sales of:
Corn were up 56%.
Soybeans were up 51%.
Wheat were down 46%.
Cotton were up 82%.
July cotton was down .33 at 84.82.
The USDA said that Egypt bought 120,000 tons of U.S. corn for the current 2009-2010 season. July corn was up 2.5 cents at $3.715.
July wheat closed up 11.25 cents at $5.11, the highest close in over six weeks, blamed on short-covering.
After the close, the USDA said that, as of March 31st, there were 510.5 million pounds of frozen pork in storage, down 14% from a year ago and less than expected. There were also 58.9 million pounds of frozen bellies in storage, down 19% from a year ago, but more than expected. June hogs finished down .12 at 86.95, ahead of the report.
The USDA said that net sales of beef totaled 20,300 tons last week, up from 6,700 tons the previous week. June cattle ended up .15 at 95.60.
July cocoa closed up $52 at $3,139, the third consecutive day higher, helped by last week’s favorable grindings reports from North America and Europe.
After the close, the USDA said that, as of March 31st, there were 1.305 billion pounds of frozen orange juice concentrate in cold storage, up 1% from a year ago. July orange juice dropped 3 cents to $1.3595.
The U.S. Department of Energy said that underground supplies of natural gas were up 73 billion cubic feet last week to 1.829 trillion cubic feet, less than expected. Supplies are now 5.5% from a year ago. June natural gas closed up 17.4 cents at $4.215, the highest close in a week.
Eurostat said that Greece’s budget deficit in 2009 totaled 13.6% of GDP, more than the 12.7% that was expected. For the entire EU-27, government deficits totaled 6.8% of GDP. The June euro fell .0090 to $1.3315, near the lowest close of the last eleven months.
A composite index of manufacturing and services in the Euro area increased from 55.9 to 57.3 in March, the highest in over two and a half years.
Moody’s reduced its credit rating for Greece from A2 to A3 and also added a negative outlook.
Statistics Canada said that its composite index of leading indicators was up 1.0% in March, stronger than expected. The June Canadian dollar closed up .12 at $1.0008.
The U.K.’s Office for National Statistics said that retail sales volumes were up 2.2% in March from a year ago, less than expected.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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