http://www.foxbusiness.com/news/2012/10/01/manufacturing-sector-grows-in-september-for-first-time-since-may-ism/#ixzz283oBKZj6
This supersedes Friday’s
Chicago PMI report. The
non-manufacturing ISM will be the next important number. The next Non-Manufacturing ISM Report® featuring the September data will be released at 10:00 a.m. (ET)
on Wednesday.
Earnings season kicks off
next week (9 October) with Alcoa. From drtkw on a
discussion board I read occasionally we have the following: Alcoa's sales
growth for the last 4-quarters (most recent quarter first) has been: -9% 1% 6%
21%. Wow…that’s one bad looking
trend. Will it continue?
My guess is the news will
be important in the next couple of weeks.
MARKET
RECAP
Monday the S&P 500
finished UP 1/4% to 1444 (rounded). VIX rose
about 4% to 16.32. The market fell again in the last hour of trading…a somewhat negative indicator. Sooner or later the market may follow this trend…or the pros will change their minds. Hey, I said it was a weak indicator.
NTSM
The
NTSM analysis remained HOLD Monday.
I mentioned that the Dow Transportation
Index last week. It is underperforming
the S&P 500 by about 12% over the past 3-months and that has the DOW Theory
crowd advising investors to sell stocks.
It is also underperforming the Morgan Stanley Cyclical Index by about
12% over the same time period.
The difference suggests
the Transports are calling for recession and the Cyclicals are not. (The Morgan Stanley Cyclical Index is even
with the S&P 500 over the past 3-months.) The drop in the Transportation
Index may be related to the slowdown in China and Europe. That has caused a huge drop in demand for US
coal used in Chinese steel production.
Norfolk Southern and CSX, both transports, get a large part of their
income from shipping coal. Bottom line:
I tend to believe the Morgan Stanley Cyclical Index, i.e., investors don’t
believe in a US recession at this point even though there have been many experts
calling for recession for months. The
issue is then one for the future; will Europe and China bring down the US
economy? Only time will tell.
MY INVESTED POSITION
Based on the BUY signal, 6
July, I moved back into the market on 9 July (after the weekend) at S&P 500
1352.
I currently have a 50%
stock allocation overall. For my age,
that is what many advisors recommend as a fully invested position, however, I
am normally much more aggressive. I have
less invested in stocks now because there’s a lot of risk.
