7.10.09

7.10.09     

          The initial claims report was the ultimate mixed bag this week. According to the Department of Labor, 565,000 people filed for jobless benefits in the week ended July 4.  That was the first reading below 600,000 since January and was well below the consensus estimate of 603,000. The claims number came with the July 4th holiday skewing the level of claims in a favorable manner. There should be some reversal of that improvement in the coming week.  Beyond that, the recognition that initial claims at 565,000 is still a lousy number and that continuing claims spiked to a record high 6.883 million in the week ended June 27 were other factors that tempered the market's enthusiasm for the report. Concerns about the economy shined through in a number of areas. Commodities and oil in particular, had a very tough week.  The CRB Commodity Index dropped 5.0% while crude oil futures slumped 10.3% to $59.83 per barrel, settling below $60 for the first time since mid-May. This has helped at the gas pump.

          Senate Majority Leader Harry Reid's asserted this week that a little less than 90% of the initial $787 billion stimulus package has yet to be disbursed. By late June, only $56 billion had been spent, and "a large proportion of that actually reflects mere transfers from the federal government to state governments, so the amount that has gotten into the economy is significantly lower. Either way, it's "not enough to make a meaningful impact." This is just another case of all talk and no action by the people who represent us in Washington.

          The Market was down for the fourth week in a row and now is below all of its important moving averages. It looks like we are still in a Bear market with more downside ahead. If any of you are looking for a little ‘action’, it will probably be to the short side.

WE ARE STAYING IN CASH 100%

Till next time