The Rally Continues - Ahead of Wall Street
Thursday, December 26, 2013
( Note: Mark Vickery will be taking care of the Ahead of Wall Street morning write-up during my absence the next few days ).
Pre-open sentiment indicates that stocks will start today's session on a favorable note and continue to build on the positive momentum following the Fed's Taper announcement. This morning's positive Jobless Claims reading should help sentiment as well.
Economic data has certainly been surprising to the upside lately. Housing continues to improve as Tuesday's new home sales numbers for November showed. The last two months of new home sales data is the highest level since the middle of 2008. The Durable Goods data from Monday and earlier Retail Sales numbers showed similar momentum, confirming the favorable momentum from both the household and corporate sectors.
This morning's big Jobless Claims drop reverses some of the
seasonality distortions in this key labor market metric, keeping
hopes alive of a strong showing from the next government jobs
report. This recent run of strong economic data is prompting
positive revisions to Q4 GDP estimates, which have been moving up
above the +2% level lately. Is it any surprise then the 10-year
Treasury bond yield is steadily moving up towards the 3% level.
It will be interesting to see how the stock market will react
once benchmark yields are firmly above that key level and still
In corporate news, Japan's Softbank is reportedly in discussions with banks to round up funding for making the long-rumored bid for of T-Mobile USA ( TMUS ). Softbank is believed to be considering combining its existing Sprint ( S ) holding with T-Mobile USA to create a viable competitor for Verizon ( VZ ) and AT&T ( T ). T-Mobile is no stranger to such tie-up proposals, as the 2011 bid from AT&T shows. The AT&T bid was disallowed by regulators and it's unclear whether regulators will respond differently to a Sprint.
Director of Research
SPRINT CORP (S): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
T-MOBILE US INC (TMUS): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report