All eyes are on Europe before this weekend's elections in Greece and France, as well as increasing speculation that Uncle Ben will come to the market's rescue once again. But there are troubling signs that other worries exist the market should be aware of, as they show slowing domestic economic growth.
Here are 10 troubling signs for today's market:
- The June Empire State Manufacturing index came in this morning at 2.29 vs. 13.8 expected and 17.09 in the prior month. This is another sign the economy is slowing down, which does not bode well for the June jobs report or the market in general.
- Industrial production also dropped 10 basis points in May.
- Speaking of jobs, the four-week moving average of jobless claims stands at 382,000. This is a three-week high and above the 375,000 level that is usually necessary to reduce the unemployment.
- Hiring slowed or halted in myriad states last month as well.
- One stat that went mainly unnoticed by the market was that exports only grew 1.6% in the first quarter, and that was before Europe's economy started to significantly contract. So much for this engine of growth.
- Consumer confidence just hit a 2012 low, despite falling gas prices.
- Despite the nice rally in the market today, the VIX is actually up for the day. A sign the market will sell off prior to the end of the day?
- In addition, yields are down some 6 basis points, which suggests a flight to quality that runs counter to the rally as well.
- The financial sector is not participating in today's rally. I have noticed recently that when the financial underperforms, the market tends to sell off near the end of the day.
- Gold prices are rising as hedge funds have increased their bets for the fourth straight week, as they anticipate increasing turbulence in European debt markets.
Be careful out there and keep that powder dry. Better buying opportunities are up ahead.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
