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Stocks didn’t exactly finish higher yesterday. In fact, they gave back all of Wednesday’s gains, and then some. But now, in a particularly ironic move, stocks appear to be ready to move back to the upside after the unemployment rate is reported to have risen to 8.1%.
Of course, we know why stocks would rally under these seemingly negative circumstances….
Investors know unemployment is rising. Fed Chief Bernanke has called for the unemployment rate to peak somewhere in the 9% range during this recession. At 8.1%, we’re almost there.
*****Back in 2002 and 2003, investors would cheer bad economic data, like rising unemployment, because they expected Greenspan to respond to any bad number with a bad number of his own, lower interest rates.
I can imagine a similar "bad is good" scenario starting to play out now. The worse the economy looks, the more money the government will throw at the problem. It didn’t end well last time, as Greenspan’s rate cuts ushered in an era of high risk taking by the financial sector that eventually led to the financial crisis of 2008 and the current recession.
*****I’ve been mentioning a certain Healthcare Tech stock to Daily Profit readers. SXC Health Solutions (Nasdaq:SXCI) has gotten a favorable mention in this letter three times in the last few days.
SXC Health Solutions is a featured recommendation from my small cap advisory service SmallCapInvestor PRO. I like the company so much I wanted to share it with Daily Profit readers.
The company reported earnings before the bell yesterday, and the numbers were very good. SXCI made $0.20 per share in the latest quarter when analysts were expecting $0.14 in per share earnings. SXCI’s fantastic results
launched the stock to a new 52-week high. There are probably more gains coming for this stock very soon.
After my recommendations here, Daily Profit readers could be up as much as 15% in just a few days. You can get more information about SmallCapInvestor PRO, SXCI, and healthcare sector stocks click here.
*****My lead equities research analyst Jason Cimpl still feels bullish. He thinks stocks should be at the start of a rally. We expect small cap stocks to outperform the broader markets. So there’s still time to take positions in the other small cap stocks I’ve mentioned this week, Graham Corp (AMEX:GHM), CardioNet (Nasdaq:BEAT), and Emergent BioSolutions (NYSE:EBS)
Just doing my part to help you make some profits in these difficult times.
*****The next Recovery Portfolio video conference is coming up on March 10, 2009 at 6:00 P.M. Eastern time. We’re entering a trade that offers is highly likely to net 24% in the coming months, and gives you 17% downside protection. Make sure there’s a spot for you, register HERE.