CONSUMER SPENDING JUMPS (Bloomberg)
“Household purchases, which account for about 70 percent of the economy, climbed 0.9 percent, the most since August 2009…” Story at…
QE TAPERING; DOES IT MATTER? (STA Wealth)
"The reason it matters to investors is that stock and bond prices have benefited greatly from QE and deficit spending. Not only has QE expanded M2 [a measure of money supply], but a large portion of that M2 has found its way directly into stocks, pushing equity valuations higher and higher. The reason QE hasn't produced significant economic growth is in part the fact that the money created on the front-end of this process has been invested in risk assets rather than flowing into the economy to stimulate GDP growth… with the Federal Reserve now withdrawing that support…this leaves the market vulnerable to the actual underlying economic and fundamental underpinnings. That story is much less exuberant." – Lance Roberts. Commentary at…
The yield on the 10-year Treasury Note fell again to 2.61% at the close.
The Bond Ghouls are getting more worried about the stock market.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE declined to 56% at the close. (A number above 50% for the 10-day average is generally good news for the market.) New-highs outpaced new-lows Thursday. The spread (new-highs minus new-lows was +95 . (It was +66 Wednesday.) The 10-day moving average of change in the spread was +1. In other words, over the last 10-days, on average, the spread has INCREASED by 1 each day. The smoothed 10-dMA of up-volume reversed down today. The internals turned neutral on the market.