(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
INCREASE IN PERSONAL SPENDING 400% OF PERSONAL INCOME INCREASE
March 30, 2012
February personal spending came at 0.8% and personal income came at 0.2%. In the short-term, in a consumer driven economy like the U.S., increase in personal spending is great for the stock market. However, in the long run, without commensurate increase in personal income, personal spending will fall off. This is a red flag. If personal spending increase continues to far exceed personal income increase, our models will start taking a dimmer view of the market.
The foregoing is pertinent only to the medium term. For today quarter end window dressing is in full swing. Please be aware that on the last day of the quarter, abrupt reversals in the market strength are common.
gold is running on weaker dollar. Dollar is weak as Spain braces for the most austere budget in the post-Franco era.
The dollar weakness is also being caused by agreement between eurozone ministers to enlarge bailout system by 40%.
Gold futures are at $1666, silver futures are at $32.49, and oil futures are $103.52.
S&P 500 resistance levels are 1410, 1415, and 1424; support levels are 1400, 1380, and 1368.
DJIA futures are up 54 points.
THE U.S. GDP SHOWS 3% GROWTH
March 29, 2012
The third estimate of GDP growth came at 3% compared to consensus of 3%. Initial unemployment claims came at 359k compared to 350k consensus.
Spanish unions caused major disruptions in a protest over the austerity reforms.
Gold futures are at $1661, silver futures are at $32.04, and oil futures are $105.18.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are down 48 points.
CHINA SELL OFF
March 28, 2012
Shanghai Composite fell 2.7% on concerns about decelerating earnings. China dragged other Asian markets down but not as severely. In the West markets are not affected as upward pressure from window dressing seem to be neutralizing downward pressure from China.
Gold and oil are pulling back.
Gold futures are at $1673, silver futures are at $32.39, and oil futures are $105.49.
S&P 500 resistance levels are 1410, 1415, and 1424; support levels are 1400, 1380, and 1368.
DJIA futures are unchanged.
THE U.S. HOME PRICES CONTINUE TO FALL
March 27, 2012
January Case-Shiller 20-city Index came at -3.8%. Housing stocks have been some of the strongest stocks in 2012. Spring selling season is still ahead, and house pricing seems to be bottoming out.
Gold futures are at $1691, silver futures are at $32.84, and oil futures are $107.12.
S&P 500 resistance levels are 1415, 1424, and 1437; support levels are 1410, 1400, and 1380.
DJIA futures are down 6 points.
BERNANKE, MONTI, AND SPAIN MOVE THE MARKETS ACROSS THE WORLD
March 26, 2012
Comments by the Fed Chairman, Bernanke, and the Prime Minister of Italy, Monti, combined with election results in Spain have moved the markets across the globe.
Bernanke said while the job market has been improving, economic conditions are far from normal. Some have interpreted this comment as further is easing is likely. Gold and silver have jumped on this comment.
Mario Monti has warned that Spain could reignite the European debt crisis.
In Spain Prime Minister, Mariano Rajoy, failed to get an outright majority in the regional election in Andalusia. According to the experts Rajoy needed to win this election to boost the chances for the tough austerity budget to succeed.
Some money managers appear to be out in full force in the pre-market doing window dressing for end of the quarter.
Gold futures are at $1680, silver futures are at $32.60, and oil futures are $107.07.
S&P 500 resistance levels are 1410, 1424, and 1437; support levels are 1400, 1380, and 1368.
DJIA futures are up 78 points.
