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Good Enough

April 16, 2010 – 8:49 am

We have had some very good earnings reports and the economic news has also been very good, though not without some concern. On the economy that has been the story for months. For instance, consumer sentiment was down this morning. It was expected to be up and foreclosure rates spiked up in March, a much higher number than the worst projections.

On the other hand new housing starts offset some of that pain by unexpectedly rising for the third month in a row. It rose 1.6% and they revised higher February’s number. Also, building permits, a leading economic indicator, were up a very strong 7.5%.

The numbers on the economy are getting stronger even though there are holes in the fabric of the economic blanket.
These holes remind us that we are not coming out of this recession with any strength, at least not yet. Even on the job front there are signs of improvement, they are just very weak. Tech jobs are leading the way, there is actual hiring in that industry.

Earnings are coming in better than expected but as previously mentioned they are going to have to be in order to push stock prices higher. The stock market is priced to perfection and everyone is already expecting good numbers. Because of that, expect a correction but it will be a correction to buy not to sell. Hopefully you will have the cash to do so.

Good Trading
Steve Peasley

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