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

Published by Wyatt Investment Research at