Are Stimulus Checks Beginning To Work?
The economy is weak, gas prices are up, stocks are down, home prices are down, etc, etc. So who is out there spending, right? But lo and behold, the May retail sales report came in better than expected at +1.2%. Maybe some of those people are the ones who got early stimulus checks, something I hear few people discussing.
Stocks are getting a big bounce this morning on the retail sales report, and also on the pullback in oil prices. Qualcomm (QCOM) raised guidance, and that is helping the semi stocks. And financials are bouncing back, save for Lehman (LEH) which is down again after being absolutely pummeled yesterday. Their CFO Erin Callan finally got the boot this morning, but even that isn't helping.
Asian stocks were down overnight. The dollar is higher today vs. the Yen and the Euro. And bond yields are higher, with the 10-year yield hitting a new high for the year at 4.16%. The 10-year still doesn't seem to be pricing in recession to me, although bears would argue it is moving higher because of inflation expectations.
I am usually skeptical of strong market opens, but given how hard we have sold off the last several days, maybe this can hold.