The stock market over the past month has gained over 20% on most the major averages. Matter of fact almost everything has been going up, even oil, which still is showing a dramatic reduction in demand on a weekly basis. This feverish buying has been on the heels of some financial data that has marked an improvement from analysts’ estimates.
These economic improvements have been touted by Wall Street as the beginning of the long awaited recovery. According to much of Wall Street the worst is over and the “bottom” is in. There is a population of Wall Street who feel that we have not seen the worst, but interestingly the bulls hog the air time with the financial press. (see Contrarian to Mainstream in Weeks – Stock Market for more insight)
Let’s take a look at some of this improved data:
Retail Sales:
Retail Sales
Existing Home Sales:
Exisiting Home Sales
Durable Goods Orders:
Durable Goods Orders
The above numbers helped launch the stock market averages to achieve historical gains in a short period of time. Does one month constitute a so called bottom? The data improvement was really in the month to month change. Year over year the data is still quit grim. If this is recovery then these numbers should not look back. What happens if they start to decline again? Where is the growth coming from? Has anything really changed over the past month or two?
Here is a piece of data that did not affect the market the way it probably should have:
Unemployment Rate:
Unemployment Rate:
Personally I feel that the “bottom” will be reached when everyone gives up on calling the bottom.
