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Time to Move On

August 1, 2011 – 4:50 pm

Over the weekend some kind of agreement was reached over the debt ceiling, at least that is what is being reported. The votes have not been counted as yet so any agreement by the leadership in the government may not necessarily translate into passed legislation by Congress. This issue put a lot of downward pressure on stock prices all last week. This morning the market started off strong but faded within the first half hour.

The ISM number came out a 7:00 am for July and it was expected to be above 50 but not by much. Above 50 is economic expansion and below is contraction. The number was 50.9. This is not a strong number and was a disappointment. Construction spending for June was up .2% when it was expected to be zero. However, .2% is close enough to zero to not mean much.

On the table is the debt ceiling and the possible deal. Once this issue is actually behind us and since earnings season is mostly behind us as well, the market will turn to the economy. It will be looking for signs of improvement and that was not found in this morning’s ISM report.

On Friday we get the Jobs report for July which is going to weigh on investors’ and traders’ minds all week assuming a debt deal will pass by Tuesday. The odds that a deal will go through are good but will it be by tomorrow the artificial deadline? In our government anything can happen.

Good Trading
Steve Peasley

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