David Moenning Daily State of the Markets: 12/02
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Rally Caps On
The bulls donned the rally caps yesterday and decided to make a point about exactly who is in charge at the moment. After a two-day siesta, traders decided they had heard enough from the bear camp and welcomed in the final month of the year with a bang. Armed with encouraging news on the inflation front, stocks resumed their year-end rally, taking the NASDAQ to a fresh new cycle high and the NYSE, Russell 2000, and Mid Cap 400 indices to new all-time highs.
The impetus for the rally resurgence was a couple of reports showing that inflation continues to be rather benign at the present time. And when the threat of inflation is removed from the mix, the fear of the Fed continuing to hike rates dissipates in a hurry. Thus, the combination of lower inflation and less incentive for the Fed to hike rates means fewer headwinds for stocks to encounter.
So with fewer worries over inflation and the Fed, stocks enjoyed a strong start to December. The Dow added 107 points, or 1%, while all the other major indices enjoyed gains of at least 1.2%. Volume was strong and breadth was solid, so there wasn�t much for the bears to complain about on the session.
Turning to this morning, it�s that time of month where jobs are the focus. The employment report, which was just released, shows that the economy created 215,000 new jobs last month, which was in-line with expectations for job growth of 217,000. October�s job totals were revised slightly lower to 44K from 56K. In addition, the report showed that the unemployment rate held steady at 5.0% and the average hourly work week was slightly higher than expectations.
In response to the report, the bond market has shown little change as the yield on the 10-year is currently trading at 4.53%. Stock traders seem to be more enthused with the report as stock futures have improved modestly after the release of the numbers and are pointing to a higher open (Dow +21, S&P +2.70, and NASDAQ +3.50). However, the bull camp will want to keep an eye on the oil pits today as crude futures are creeping higher once again and are quickly approaching the $60 level (crude futures are currently trading up +$0.63 to $59.10)
So with stocks pointing higher once again this morning, the question of the day is if the bulls will be able to find a way to move the Dow and S&P up to new highs.
Stocks "In Play" This Morning:
IBM � Buy rating reiterated at First Albany
WMT � WSJ says WMT has lead over TGT so far this shopping season
DELL � DigiTimes reports notebook computer sales greater than desktops on Black Friday for the first time ever
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: IBM
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
The bulls donned the rally caps yesterday and decided to make a point about exactly who is in charge at the moment. After a two-day siesta, traders decided they had heard enough from the bear camp and welcomed in the final month of the year with a bang. Armed with encouraging news on the inflation front, stocks resumed their year-end rally, taking the NASDAQ to a fresh new cycle high and the NYSE, Russell 2000, and Mid Cap 400 indices to new all-time highs.
The impetus for the rally resurgence was a couple of reports showing that inflation continues to be rather benign at the present time. And when the threat of inflation is removed from the mix, the fear of the Fed continuing to hike rates dissipates in a hurry. Thus, the combination of lower inflation and less incentive for the Fed to hike rates means fewer headwinds for stocks to encounter.
So with fewer worries over inflation and the Fed, stocks enjoyed a strong start to December. The Dow added 107 points, or 1%, while all the other major indices enjoyed gains of at least 1.2%. Volume was strong and breadth was solid, so there wasn�t much for the bears to complain about on the session.
Turning to this morning, it�s that time of month where jobs are the focus. The employment report, which was just released, shows that the economy created 215,000 new jobs last month, which was in-line with expectations for job growth of 217,000. October�s job totals were revised slightly lower to 44K from 56K. In addition, the report showed that the unemployment rate held steady at 5.0% and the average hourly work week was slightly higher than expectations.
In response to the report, the bond market has shown little change as the yield on the 10-year is currently trading at 4.53%. Stock traders seem to be more enthused with the report as stock futures have improved modestly after the release of the numbers and are pointing to a higher open (Dow +21, S&P +2.70, and NASDAQ +3.50). However, the bull camp will want to keep an eye on the oil pits today as crude futures are creeping higher once again and are quickly approaching the $60 level (crude futures are currently trading up +$0.63 to $59.10)
So with stocks pointing higher once again this morning, the question of the day is if the bulls will be able to find a way to move the Dow and S&P up to new highs.
Stocks "In Play" This Morning:
IBM � Buy rating reiterated at First Albany
WMT � WSJ says WMT has lead over TGT so far this shopping season
DELL � DigiTimes reports notebook computer sales greater than desktops on Black Friday for the first time ever
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: IBM
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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