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Economic Reports Continue To Disappoint

  • Written by Syndicated Publisher No Comments Comments
    January 30, 2014

    As I noted in my weekend column, so far in 2014 economic reports have not been supportive of the Fed’s contention in December that the economy is finally on a sustained recovery pace.

    In the month since the Fed’s taper decision, economic reports from key areas of the economy; jobs, housing, auto sales, and consumer confidence, have not been impressive.

    There was that horrific shock of only 74,000 jobs created in December. New home starts plunged 9.8% in December. Permits for future starts fell 3.0%. Although up for the full year, existing home sales in the 4th quarter were down 27.9% from the same quarter of 2012. Mortgage applications continued their sharp decline, ending December at the lowest level in 13 years. Auto sales slowed significantly in December in spite of the return of rebates and zero percent financing to entice buyers. Consumer sentiment fell in December to 80.4 versus the consensus forecast of an improvement to 84.0.

    There have been additional discouraging reports this week.

    Yesterday it was more confirmation that the important housing industry is slowing, with the report that new home sales fell 7% in December, while previously reported numbers for November were revised down.

    This morning it was that Durable Goods Orders plunged 4.3% in December, the biggest decline since last summer, and significantly worse than the consensus forecast of an increase of 1.8%.

    It adds to the importance of the first look at 4th quarter GDP growth, which will be reported Thursday morning. The consensus forecast is for 3.3% growth. But these December reports that are considerably less than forecasts, and downward revision of November reports, raises questions about how accurate the GDP forecasts will be.

    S&P 500 sitting on next potential support.

    Our short-term technical indicators have been calling another short-term pullback.

    The S&P has broken through the first potential support at its 50-day m.a., and is sitting on next potential support at the trendline that halted all of its previous pullbacks in the ‘favorable season’ rally since last November.

    But is it going to hold this time or are we in for something worse?

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    To read my weekend newspaper column click here:  Was The Fed Too Hasty With Its Taper Decision-

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    In addition to the charts and signals in the ‘premium content’ area of this blog, an in-depth Mid-Week Markets report on the stock market, gold, and bonds, will be out tomorrow afternoon in your secure area of the Street Smart Report website.

    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

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