March 27, 2013
(This is Mark Vickery substituting for Sheraz Mian this
morning and all this week.)
Compared to yesterday's smorgasbord of econ data, we'll be
dieting today. Pending Home Sales come out after the bell, and
the only notable earnings reports (Q1 season hits full throttle
in the next 2-3 weeks) are after today's close.
European markets were down Wednesday when it was reported not
only that Italy has failed to formulate a coalition government,
but that a top politico in the country said, "Only an insane
person would want to govern Italy right now…" I'm sure it sounded
much nicer in Italian.
Otherwise, there's little to do but review what we know from
yesterday -- and after which the market again began to flirt with
all-time highs, this time on the S&P 500: Durable Goods up
(good, however ex-transportation was down), Fed New Home Sales
way down (not good, though everyone knew this number was going to
fall from January's number), March Consumer Confidence down (bad
-- this number keeps falling, and this past month was by nearly
10%), and the Case-Shiller Home Price Index up (good, although
this reflects the ancient history that was January 2013).
Higher taxes from the fiscal cliff and the sequester no doubt
have had some impact on the negative numbers here. From one
angle, we might even breathe a sigh of relief that the impact
wasn't worse; consumers may be feeling some bruises right now,
but it doesn't seem like anyone fears breaking his or her
So back to Case Shiller, it is another piece of evidence that
illustrates our economic recovery is the result of traction in
the housing industry. Pending Home Sales will help shed some
light on this momentum going forward -- and again, sequestration
issues may be somewhat of a wet blanket here -- but ultimately,
our Zacks experts who have long predicted a housing market-led
recovery should rest easy these days.
As far as the S&P 500 touching new highs, this looks like
it may be a struggle to maintain in the near-term, especially
without any expected new catalysts. It's like when Chuck Yeager
tried to fly that plane into outer space: as soon as he started
to see the stars, the engine began to sputter. Does our current
market have "The Right Stuff?
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