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Some Good and Bad News

January 25, 2013 – 6:09 pm

stock-market-art_webThe new home sales report out this morning was a little disappointing, down 7.3% on top of an early report this week for existing home sales that was also down. The housing market, which has improved sharply from a year ago, is still not out of the woods. It will likely continue to improve this year but the road to recovery is going to be full of twists and turns.

In other economic reports, few though they were this week, the Leading Economic Indicator (LEI) monthly release showed a better than expected pick up. It was up .5% from an .0% a month ago and that was after being revised from -.2%. The expectation was for an increase of .4%. Also, the weekly unemployment claims fell surprisingly by 5,000 to 330,000. Last week it fell sharply and the expectation was for it to rise to around 360,000 but it fell instead. That might mean better job growth in January. We will have to wait and see.

We are most of the way through earnings season and the numbers have generally beaten the very low expectations. Therefore, with decent economic news and better earnings numbers the market is improving. Now it is a question of how far and when might we expect the coming correction? There is always a correction.

Good Trading
Steve Peasley

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