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Drags to Expansion

February 28, 2011 – 5:56 pm

This morning the market is adding to the move up on Friday after last week’s 2% correction from its recent high. There was nothing in this morning’s news or over the weekend that should push prices up or down that we didn’t already know about. The Libyan crisis is still in full bloom but oil prices are easing as everyone realizes we are awash in the gooey stuff.

The report for January’s personal income came in this morning. It was up only 1% and spending was also very small, incrementally pushing up the savings rate. Pending home sales fell for the second month in a row in January. However, data coming out of Chicago showing a stronger than expected manufacturing sector in February seemed to weigh on the market more than anything else.

The manufacturing and business sector in the U.S. is doing much better than the housing and job market. It is clear that world growth is helping our companies but not our workforce. That needs to change if our
economy is to maintain momentum in the current expansion.

This Friday the report for February jobs will be released. We need at least 150,000 to just keep up with the growth of our labor force. We need much more to push the unemployment rate down and our economy up.

Good Trading
Steve Peasley

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