“Initial claims for unemployment benefits hit the lowest level since January 2008 the week ended May 4, the Bureau of Labor Statistics said Thursday.
First-time claims for jobless benefits fell a seasonally
adjusted 4,000 to an upwardly revised 323,000, bolstering the view that the
jobs market is improving. However, many economists remain skeptical that a big
surge in job creation will occur the rest of the year.” Story at…
http://www.usatoday.com/story/money/business/2013/05/09/initial-claims-unemployment-benefits-week-ending-april-24/2146367/
WHOLESALE SALES PLUNGE MOST SINCE MARCH 2009
(Reuters/CNBC)
“U.S. wholesale inventories rose in March, fueled by
increased stocks of cars and machinery which have provided support for economic
growth early in the year ….Sales by wholesalers, however, unexpectedly fell in
March, down 1.6 percent. It was the biggest drop in four years and confounded
economists' expectations for a 0.1 percent increase.” Story at…http://www.cnbc.com/id/100723726
YIELDS ON JUNK BONDS REACH NEW LOW (Wall Street Journal)
“The Barclays U.S. Corporate High Yield index fell to a
record low of 4.97% Tuesday, marking the first time the benchmark tracking debt
issued by weaker U.S. companies dropped below 5%. On Wednesday, it fell to
4.96%. The yield on the index has lost more than a percentage point this year,
in a sign of hefty demand for income-producing securities. Bond yields fall
when prices rise.” Story at…http://online.wsj.com/article/SB10001424127887324744104578470812182691622.html
Junk Bonds tend to trade like stocks since they are
sensitive to the economy. The risk in
junk is companies will fail if the economy goes sour; but I think this also
demonstrates fear of stocks.
10-YEAR TREASURY YIELD
10-yr US Treasury yield is now 1.8%, down 5-basis points
in the past year although it has risen this year. Market Data from Bloomberg at…http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/
With Bond rates so low, we must conclude that in spite of
the historic run in stocks, the demand for Bonds remains at unprecedented
levels. Widespread concern about
investing in stocks remains and, more importantly, the Bond Market does not
agree that all is well with the economy or the stock market.
10% CORRECTION (MarketWatch)
“The U.S. Investment Policy Committee at S&P Capital
IQ is concerned that the S&P 500 has limited upside from here. The index
has gained more than 20% since mid-November and now trades on the high side
relative to measures such as its 200-day and 50-day moving average. Just 2 of
10 key S&P 500 sectors – industrials and health care – now trade at
discounts to their 20-year median valuations. The most overvalued sectors:
telecoms and utilities…Based on this, S&P’s seers are predicting an 8% to
10% correction for the S&P 500…But they point out that a correction won’t
derail the bull market: S&P Capital IQ still pegs the S&P 500 at 1,670
in 12 months.” Full story at…http://blogs.marketwatch.com/thetell/2013/05/09/expect-10-stock-market-tumble-sp-analysts/
MARKET RECAP
Thursday, the S&P 500 was down 0.4% to 1,627 (rounded).
Thursday, the S&P 500 was down 0.4% to 1,627 (rounded).
VIX was up 3.8% to 13.13.
NTSM
Thursday, the overall NTSM analysis was again HOLD at the close,
unchanged from yesterday.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). My reasoning may be found at…(although
that probably looks pretty lame by now.)http://navigatethestockmarket.blogspot.com/2013/03/why-i-got-mostly-out-of-stock-market.html
The NTSM system sold at 1575 on 16 April. (This is just another reminder that I should follow the NTSM analysis and not act emotionally – I am under-performing my own system by about 2%!)
I have no problems leaving 20% or 30% invested. If the market is cut in half (worst case) I’d
only lose 10%-15% of my investments. It
also hedges the bet if I am wrong since I will have some invested if the market
goes up. No system is perfect.
