Stocks shrug off last week's drop
I must say that I am a bit surprised that the market continues to move up strongly for a second day. I like it, but I am surprised.
As usual, folks are looking for reasons. Take your pick:
* continued strong earnings releases and guidance
* stronger consumer confidence
* CPI dropped to 1.9% from 2% in May
But what about slowing consumer spending in June? The slowest rise in a year.
More importantly, similar good news was released last week and it didn't matter. So I think the rise and drop are unrelated to fundamentals like health of the economy. I contine to believe that it was caused by an abrupt shift in liquidity.
If I'm correct, then only a shift in liquidity will change that scenario. And I don't see that shift happening yet. so I feel like this is more of a trading response to perceived oversold conditions.
As usual, folks are looking for reasons. Take your pick:
* continued strong earnings releases and guidance
* stronger consumer confidence
* CPI dropped to 1.9% from 2% in May
But what about slowing consumer spending in June? The slowest rise in a year.
More importantly, similar good news was released last week and it didn't matter. So I think the rise and drop are unrelated to fundamentals like health of the economy. I contine to believe that it was caused by an abrupt shift in liquidity.
If I'm correct, then only a shift in liquidity will change that scenario. And I don't see that shift happening yet. so I feel like this is more of a trading response to perceived oversold conditions.
posted by Andrew at
7:31 AM
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