Saturday, June 27, 2009

Next Week On Wall Street

The theme that is being repeated lately has to do with the alleged green shoots.

Investors know that the severity of the recession has eased, these are the green shoots. Some of the signs are improved consumer confidence and some better than expected housing starts and older home sales. One might suspect that the improved consumer confidence and consequent spending is key since this accounts for a major part of economic activity.

We know unemployment is off the charts. Investors are looking to see if there is any sign of the trend easing.

What we are now seeing is investors wanting more signs that the green shoots are taking hold and on some days it looks like it has and on other days, no deal. The market's day to day rise and fall has often been attributed to this reasoning, green shoots are good - green shoots are withering. The day to day economic data that investors parse is inconsistent, some days its good, some days its bad.

Wall Street is closed on Friday for the July 4th weekend. Shorter weeks are historically more volatile.

Reuters: Stocks eye jobs, other data in July 4th week
Investors will pick apart the job figures and reams of other economic data released during this four-day week to assess if recent signs of stabilization point to a sustainable economic recovery.

While unpleasant surprises may trigger a long-awaited correction, analysts said evidence of further economic stabilization would make the bulls grow bolder and help stocks break out of their recent consolidation range.

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