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Market Commentary: A Whiff of Good News

January 26, 2009 – 2:41 pm

  There will be a lot of earnings releases this week and a number of economic reports as well. This morning we had two important stats: December existing home sales and December leading economic indicators.  

There was surprise in both reports and instead of a negative surprise it was positive. Sales for existing housing was up, not down as expected. It was not up much but any improvement is a breath of fresh air to the stock market. Also, just as important, inventory fell from 11.2 months of supply to 9.3 months. That is a big decline. A normal inventory Level is 4 to 6 months therefore we are far from normal but it is moving in the right direction.  

Leading indicators were expected to be down as well. This report gives us a hint of what the future might look like for the economy. It went up, albeit only a fraction, but it was up instead of down which was the expectation. 

New home sales come out in Thursday and the final quarter GDP numbers are released on Friday; two very anticipated numbers. This will be an interesting week.  

Good Trading
Steve Peasley 

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