Short-Term Key: Neutral Long-Term Key: -5 (Neutral)
For those who follow the school calendar, summer ends this week, bringing with it the start of a traditionally weak period for stock prices. October, of course, has been the worst month for market disasters, but September has statistically been the weakest month. With the uninspiring economic data that has been pouring in over the past few months, investors have every reason to be nervous.
On Friday, for example, the Commerce Dept. reported that the U.S. economy grew at a rate of just 1.6% during the second quarter. Stock prices rose on the news, simply because everyone had feared an even worse performance. Nonetheless, we see no reason to cheer the fact that the pace of economic recovery is slowing. We doubt this quarter's growth will be much better.
The other notable event that occurred on Friday was Ben Bernanke's speech to economists at the Kansas City Fed’s annual gathering in Jackson Hole. The gist of his remarks is that the Federal Reserve stands ready to intervene should there be further signs that the economy is turning down.
Read more...Bookmark/Search this post with: