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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • UNLUCKY? NOT TODAY! - By Jennifer Coombs 0 comments
    Jun 13, 2014 2:11 PM

    It looks like Friday the Thirteenth is turning out to be quite positive for the stock market. All of the major indices have moved into the green, but whether or not they will stay at those levels remains to be seen. Everything is hanging on by a thread and any negative news could send it tumbling. There were two major economic releases this morning that reported rather disappointing results, but the market appears apathetic.

    The Producer Price Index (PPI), issued by the Bureau of Labor Statistics, is a group of indexes that measure the average change over time of prices received by domestic producers. In the month of May, inflation turned negative which ultimately translates to reduced revenues for producers. The headline index includes all times, including those products that are highly sensitive to inflation such as food, energy and trade services. For May, the headline reading came in at -0.2% which was well below consensus' estimate of 0.1% and the April period of 0.6%. Minus the inflationary components, the core PPI was unchanged at 0.0% compared to the 0.3% reading from April. So, we believe that these numbers will ease inflation fears at the Fed a little bit, but it's clear that the readings are volatile from month to month (according to the chart). The Fed's tapering schedule should remain unchanged.

    From the producer-side to the consumer-side: The University of Michigan's Monthly Consumer Survey Center was released for the month of June, coming in slightly lower than May. The index is a survey of 500 households' opinions on the economy as well as an update on their own financial situations. The headline reading was relatively weaker than last month, coming in at 81.2 for June compared to 81.9 for May. The consumer isn't optimistic, but they aren't depressed, either. It's important to note that sentiment doesn't always translate into spending, so more reliable figures (i.e. income data) would be a more reliable temperature reading. Clearly the S&P 500's performance has been soaring above sentiment, meaning that consumers are stuck in limbo as individuals, but the market is in a far healthier place.

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