May 11, 2008
The markets have lost ground last week with soaring oil prices
The U.S. equity markets may fluctuate within a narrow band this week in the face of soaring oil prices and economic uncertainties.
The markets have lost ground last week with soaring oil prices - the Dow Jones has sold 2.4%, the S & P 500 1.8% and the Nasdaq 1.3%. However, he managed to keep its April gains while corporate results for the first quarter have not created major disappointment despite the credit crunch and economic slowdown.
The three major stock indexes were even close to surpassing their moving average at 200 days, a level that signals a positive trend.
"It is the yardstick by which we measure the overall trend. Stock markets attach great importance", said Bill Strazzullo, head of investment policy at Bell Curve Trading.
But while the period of publication of results coming to an end and that important economic indicators are expected, investors may be inclined to reap gains on paper from the trough of March rather than waiting for see what are the indicators to come.
"We are doing that has been a sharp rise and we will go beyond the positions where you are comfortable. The rising market has attracted a lot of skepticism," Bill Strazzullo. "The volumes on the rise were not the best, indicating that many people have never believed that things really improved."
INFLATION AND CONSUMPTION
The consequences of the sharp rise in oil prices and gasoline consumption will be better evaluated Tuesday with the publication of retail sales for the month of April.
We know the state of morale Friday with the consumer confidence index Reuters / University of Michigan. It is expected to decline to 62 in May, after 62.6 in April.
During the past week, several distributors have published their sales figures for April, the majority of them reporting an improvement over last year. The discount retailers were particularly well maintained, the consumer becoming increasingly sensitive to price.
It is expected for Tuesday quarterly accounts of the number one distribution Wal-Mart Stores, traditionally published at the end of publication of results.
It will be followed Wednesday by the chain of department stores Macy's and competitors JC Penney and Nordstrom Thursday.
The market is also concerned about inflation. He wondered if the rise in energy prices and food affects the prices of other goods. It will be set Wednesday with the consumer price index.
Economists polled by Reuters target a price index up 0.3% in April compared to March. Excluding energy and food prices are expected to increase by 0.2%.
In this context, the Federal Reserve USA might be tempted not to lower its interest rates and maintain its main rate to 2%.
"Many people say that the Federal Reserve has gone too far in distributing cash in abundance and it embarked on an inflationary monetary policy," Lincoln Anderson, managing director and head of investments at LPL Financial Services.
"I do not share this concern. For the moment, the inflation data are correct. But the uncertainty is such that is difficult to see the market make a big breakthrough."
by erectusplus at 9:33 AM |
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