Stocks Level Before Holiday Weekend
The US stock market fluttered close to all-time highs Wednesday morning as economists analyzed new data.
Thursday, November 27, 2014 - 00:00
Information from the Department of Commerce indicated consumer spending rose in conjunction with incomes in October. This data showed that households are spending appropriately in the beginning of the holiday season. Additionally, filings for unemployment benefits gained more than expected last week.
Investors’ next target will be the OPEC meeting in Vienna tomorrow. Venezuela, Saudi Arabia, Mexico and Russia would not agree to reduce oil supplies yesterday. US equity and bond markets are closed Thursday for Thanksgiving.
“The data this morning isn’t great,” Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles, told Bloomberg. “All eyes are going to be on the OPEC meeting tomorrow and what’s going to happen with the price of oil. People are waiting to see if that bleeding will stop and if there will be any potential production cuts. There’s not going to be much volume today with a lot of people out.”
Stocks were flat after declining from record highs yesterday. The S&P 500 and Nasdaq posted small gains, while the Dow inched lower.
Black Friday not as important as many think
According to MarketWatch, analysts that fixate over Black Friday and Cyber Monday are wasting their time. The biggest shopping days of the year might seem to be great indicators of economic activity and overall market trends, but in reality the numbers don’t follow.
For example, last year’s market declined initially following disappointing retail sales figures from the closely-watched shopping days. But from that point through the end of the year, the Dow increased 3.5%.
In another instance, during the financial crisis of 2008, Black Friday and Cyber Monday reports were disappointing and the Dow fell 6.6% in the two days. But once again the index was strong through the rest of the year, adding 7.7%.
While in many cases, weak Black Friday and Cyber Monday data indicated strength through the rest of the year, there is no direct correlation. The numbers on these days are no better than any other day as predictors of stock movement.
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