Market Dips On Last Day of a Very Good Quarter

The market is seeing some selling pressure after a weaker than expected consumer confidence report came out, which showed that consumer confidence fell to 49.3 in June vs. 54.9 last month and expectations of 55.3 this time. The drop in confidence in June appeared to reflect a weak labor market. End-of-quarter window dressing by portfolio managers could give stocks another upward pull today.

The S&P 500 is up +15% this quarter, which I believe is the best quarter since Q4 1998. And some markets in Asia had their best quarter in 15 years.

The govt. is planning to roll out its PPIP program, which was once touted to be as big as $1 trillion, but is now expected to get off the ground with as little as $50 billion in investments. This is the plan aimed at lifting the toxic assets off the balance sheets of banks.

In other news:

• A report on home prices showed a decline of 18.1% compared to a year ago in the 20 largest U.S. cities. The drop was not quite as severe as anticipated.
• H&R Block rose 97 cents to 16.64 after reporting better-than-expected profit in the latest quarter.
• Apollo Group, owner of the University of Phoenix, rallied 6.01 to 71.92. Its earnings also beat estimates, and Apollo increased its share buyback.
• General Mills gained 33 cents to 56.17 after hiking its quarterly dividend.
• Corning said demand is growing faster than expected for glass used in LCD TV’s. That could be an indicator of the consumer mood. Corning shares were down 7 cents at 16.20.

Asian markets were mixed overnight; the dollar is higher, which is weighing on gold and commodity prices; the 10-year yield is higher at 3.50%; and the VIX is popping +7.8% to 27.33.

Trading comment: No big moves for me in the last few days. I am still mulling adding to some of our etf hedges and we enter July, and also may look to take some short positions (or inverse etfs) in the energy space. I think oil looks toppy, and is due for a correction similar to last summer. Intraday, I may play this market for some sort of bounce as the bulls may try to take a stand on this last day of the quarter.