The U.S. stock market is poised to open relatively flat this morning, after trading higher over night. The first bit of economic news for the New Year has come out on the weak side today, as retail sales numbers for December came out flat, and weekly jobless claims jumped up to 399,000. Williams Sonoma also scaled back earnings expectations for the 4th quarter, indicating that margins were hit due to significant discounting over the holidays.
This data flies in the face of what we have seen and heard in the media over the last month. It will be interesting to see if this becomes a trend.
It should be pointed out that the Dollar has rallied sharply in recent weeks. This will hurt the earnings of the multi-nationals, and those have been the best performing stocks for some time. At the same time, gas prices have slowly ticked up, moving closer to that $3.50 per gallon level, and there are forecasts of $4.00 or more per gallon by Spring. That will kill off any economic growth.
Keep an eye on the major averages. They have been slowly moving upward with low volatility. It will only take one lousy trading day to change the overall character of this market from modestly bullish back to bearish.
Scott Cole
www.whentobuyandsellstocks.com
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