SLB, up over 1%, is near its 52-week high. BHI, likewise, is up about a percent. EPD, down a bit today, is very near its 52-week high. AAPL is surging -- another 1% -- on top of recent gains. Talk is that this $600 stock will test the $700-mark again. T is holding its own. WMB, having hit new highs recently, is holding its own, staying flat, near its 52-week high. BRK-B is near its 52-week high. CLNE is surging.
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Earlier today I sent this note to Don, regarding today's a) initial claims report; and, b) today's revised GDP which showed a 1% contraction (a huge story, by the way):
First, the unemployment story: whether fictitious or not, it's the headline story that gets repeated.
Second, and much, much more important. That story on -1.0% revised 1Q14 GDP -- a huge contraction and much worse than originally reported -- the original report, as bad as it was, at least showed some growth. The revised report, not only showed contraction, but a huge contraction. This is why it's a huge story in my mind. They blamed it on the weather. The weather will not be a factor for the rest of the year, no matter how bad hurricane season is.
More importantly: the 0.1% was the headline story folks like you and me were told. One knows that the movers and shakers (like Janet Yellen, Donald Trump, Dennis Gartman, Jon Corzine) knew what the real number was when they had their staff look deeply into their own beige books. So, the movers and shakers knew that the economy contracted long before the rest of us. And despite that knowledge, they kept investing in the market: not only did the market hold its own, but it is currently hitting new records.
If movers and shakers kept buying into the market when they knew the revised number was going to be awful, that tells me they were not concerned. In fact, they were bullish.
A lot of folks will say that the movers and shakers think the 1.0% contraction will mean Yellen will have to keep printing money and when she stops the party is over. Maybe. But I don't think she will stop printing money this year. She will taper, but the movers and shakers have already baked that into their won numbers.
So, when I see that the market held its own, and subsequently set new records, despite an incredible contraction of 1.0%, that blows me away. And even if one argues the movers and shakers did not know, it's history. The 1.0% contraction is behind us. If analysts stick to their guns that GPD will grow 3% for the entire year, it's gonna be a humdinger of a year, these last three quarters to make up the contraction that has already occurred.That's what I wrote. Now, later, I read this summary in Yahoo!In-Play talking about the market today:
The stock market ended the Thursday session on an upbeat note despite receiving some disappointing data ahead of the open. The S&P 500 settled higher by 0.5% with nine sectors registering gains, while the Dow Jones Industrial Average (+0.4%) underperformed throughout the trading day.Interesting, huh?
Shortly before the open, the second revision to Q1 GDP revealed a 1.0% contraction, while the Briefing.com consensus expected a smaller decline of 0.5%. Interestingly, the subpar report led to just a brief stumble in the futures market, which recovered swiftly. That recovery may have been aided by today's initial claims report, which suggested the labor market remains on solid ground.