Stocks Limp into End of First Quarter
Stocks limped into the end of the first quarter on Thursday. After encountering the first correction since the end of November, stocks have put on an impressive display during the second half of March as the major indices have largely recovered and are either at or very close to their highs for the current market cycle. However, with some big economic data on the near-term horizon, it wasn’t surprising to see the buyers stand aside on the final day of the quarter.
Although the market appears to have sidestepped the problems in the Middle East/Northern Africa and has also come to the conclusion that the tragedy in Japan is not likely to have a big impact on the global recovery, traders may have been a little hesitant yesterday afternoon in from China’s PMI report, the Eurozone PMI’s, and the all-important Nonfarm Payroll report here at home. Thus, some sell programs dictated that stocks finish down ever-so slightly on the first quarter’s final session.
Looking at the charts, we continue to be both impressed and concerned. If you are the worrying type, the potential double-top formation on the charts of the Dow, S&P and NASDAQ is certainly a reason for concern. Yet, for those who tend to be a little more optimistic, the action in the Russell 2000 and S&P Midcaps suggests that things are going pretty well at the moment. (Both the Smallcap and Midcap indices finished at new all-time highs on Thursday and have broken above any near-term resistance levels).
Turning to this morning… China’s PMI came in above expectations, which has nipped the worries about global recovery in the bud. And while the European PMI reports showed a bit of a pullback in the PMI levels, the bottom line is the reports show that the recovery is ongoing. But the big news this morning is in the U.S. as the Jobs report has just been released – so let’s get to it.
On the Economic front… The Labor Department reported that Nonfarm Payrolls rose in the month of March by 216,000. This was just above the consensus estimates for an increase of 192,000. The private sector (aka the household survey) showed gains of 230K jobs, which again was above the estimates.
The nation’s Unemployment fell once again to 8.8%, which was below the expectations for a reading of 8.9% (February was 8.9%).
David D. Moenning
Editor: The Daily Decision
