Tuesday, November 24, 2009

Consumer Confidence Up Ahead of Black Friday

The market is lower this morning, but not in any major way. Asian markets sold off overnight, and the dollar is up a bit, so some selling is not surprising.

In economic news, third quarter GDP was revised lower to +2.8% from an initial estimate of +3.5%. The revision was widely expected, so not much of a market mover. Also, the CaseShiller Home Price Index came in at 146.5 for September, which was basically in-line. The Composite for prices fell -9.4%, which is an improvement from the previous month's -11.3% decline.

The bright spot this morning was the Consumer Confidence Index for November, which rose to 49.5 vs. 47.5 consensus. This is timely as it comes just a few days before Black Friday. I think those people that go to the crowded stores are crazy. I deal with enough traffic in LA without subjecting myself to bigger crowds. That said, I hope retailers do well, and have a good Holiday season. Hopefully consumers have been in saving mode for most of the year, so they are "in shape" to spend a little for the holidays.

In corporate news, HP reported a solid quarter, while med tech behemoth Medtronic (MDT) had a great quarter and its stock spiked higher this morning.

Asian markets were lower overnight, after Chinese regulators warned about higher bank capital ratios; the dollar is up a bit, while oil and gold prices lower; the 10-year yield is lower at 3.35%; and the VIX is also lower to 20.85.

Trading comment: The 1100 level for the S&P was resistance, but not looks to have turned into support. If the market can hold these levels, I think there could be more upside from here and would look for new highs. Keep doing more of what's working, and less of what isn't.


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