Egypt Calms Down
The rioting in Egypt has calmed down substantially. The military has stated that it will not fire upon protesters, which would seem to be a tacit vote of no confidence for the Mubarak government.
Not that shooting people is the only way to show support for the government. But the statement by the military seems like a pre-emptive move.
In any event, the reduced tension in Egypt seems to have the stock market breathing a sigh of relief. Oil prices have backed off slightly from yesterday's highs.
*****Manufacturing data is coming in above expectations, and not just in the U.S. England's manufacturing sector grew at record pace last month. Europe and China showed growth as well.
Of course, we must remember that manufacturing is coming off of some extremely low levels during the wake of the financial crisis. Still, growth in manufacturing is beating expectations. And manufacturing accounts for around 11% of the U.S. economy, so when the ISM Manufacturing Index expands at the fastest pace since 2004, it's a good thing.
One thing to note is that the prices paid component of the ISM Index made a sizeable jump. Some inflation is a by-product of a growing economy. The fear is that prices will begin to outpace the recovery here in the U.S. and force the Fed's hand. That's happening now in Brazil, India and China.
Going forward, economists are raising their expectations for consumer spending and auto sales, too.
*****UPS (NYSE:UPS) beat earnings expectations. Analysts were looking for $1.05 a share in 4Q profit, UPS reports $1.08. The company said it shipped 440 million packages between Thanksgiving and Christmas. That was better than the 430 million in had expected.
UPS also said that online shopping is what drove its results.
UPS is considered an important measure of economic activity. A healthy economy ships a lot of stuff. UPS indicates the economy is buzzing along....
*****Here's a little gem Jason Cimpl dropped on his TradeMaster Daily Stock Alerts members this morning:
Today is the first day of the month - a day
that is cyclically bullish for equities. David Rosenberg, infamous
investor, noted that last year the
SPX was up a cumulative 134 points on the first day of the
month.
Considering the annual increase was 143, the first day of the month
accounted for 95% of last years gains. In other words, you could have
traded 12 times last year and matched the
market.
But how fun would that be. Anyway, statistics favor a positive close today, despite my projections of a negative close for the week.
Careful readers will notice Jason is calling for the stock market to close lower this week – although he does have half the portfolio positioned long. We get employment data later this week, and that could be the catalyst Jason is looking for.
Despite the good numbers from manufacturing, retail sales, shipping etc., the U.S. is adding jobs at a slow pace. Weekly new unemployment claims seem permanently stuck over 400K. And there's no reason to think last week was any better...
