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MORNING MUSINGS

A bit of mixed data this morning has investors scratching their heads over the next move in the equity market.  The index of leading indicators was up by 1% in September.  This was the 6th consecutive gain.  The largest contributor to the improvement was interest rates which remain accommodative.   Jobless claims, on the other hand, continue to reflect the extreme weakness in the economy.   Claims jumped to 531K – a truly staggering number for an economy that is supposedly in the middle of a recovery.  Continuing claims dropped by 98K which is a clear sign that the ratio of firings to hirings is becoming more favorable.

The most important news of the day was earnings from UPS.  The transport company is highly sensitive to the economy and they continue to see signs of stability and a weak recovery at best.  CEO Scott Davis had this to say about the recovery:

“I’m encouraged by the signs of economic recovery that are becoming apparent, although we still have a long way to go.

Kurt Kuehn, UPS’s chief financial officer elaborated on their outlook:

“Although there are signs of economic recovery, forecasters predict U.S. consumers will spend conservatively for the holidays this year.  Our customers have widely differing views on their outlook for the holiday season. Nevertheless, UPS is primed to handle the seasonal package surge as it materializes.”

On the conference call Davis added:

“It’s got a long way to go to get back to the 2007 levels.”

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