Today's release of economic news shows the economy is not getting any better any time soon. Durable Goods dropped 6.2% in October after a downward revision of another 1% in September. The jobless claims report was weak but slightly better than expectations. These numbers will likely continue to be ugly and at the point where the markets see the bottom, stocks will begin to build a positive trend.
Yesterday, the U.S. Government committed another $800B focused on improving the mortgage market and other consumer loans. This is the area in the economy that certainly needs a jump start and it looks like the Federal Reserve gave it a good push. Mortgage rates declined and consumers with good credit raced to their mortgage brokers to refinance their home loans. Lower interest rates for individuals will free up cash to spend on other items. This process will not be instantaneous but it is certainly another Tea Leaf in our road to recovery.
The stock markets were up slightly yesterday for the third day in a row. However, in reality stocks were mostly neutral waiting on the next piece of news. Today we got it and we are seeing lower trends. It is likely investors won't be too bullish today as Black Friday approaches and the reality of retail sales for the holiday season will be discussed all weekend. It would be shocking to see shoppers pulling out their wallets this holiday season but we wait to see if spending is as bad as forecast. The markets should lean to the downside until next week.
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