Spain GDP showed another quarter of declines making this now the second time the country has gone into recession since 2008. 16 Spanish banks got downgraded following Spain’s downgrade last week.
Markets strongly reacted to the Spanish news along with some other poor US economic reports.
US consumer spending slowed down more than what was expected in March even though income did rise. The April Chicago Purchasing Managers’ Index (PMI) fell well below the expected value. In April the PMI came in at 56.2 down from 62.2 and the expectation was for it to fall to 60. Keep in mind that any number above 50 still means expansion.
The April Jobs number comes out this Friday and will heavily dictate trading leading up to and after the report comes out. The expected number is 162,000 jobs added which would be better than March but still far below the needed 200k+ which we saw in Dec, Jan, and Feb.
While the markets where down today they didn’t fall as bad as they could have in reaction to the persistent Eurozone woes. Many are starting to call for the correction to continue in a sideways motion. Remember there are two ways to have a correction; 1) is direct downward movement where you see the chart just drop 2) the other way is to simply go flat – sideways – over a period of time. Whether its a V or just a flat line – both end up correcting the market.
Its still wise to keep some powder dry, but we might not see outright bargain bin on sale stock prices rather just flat stock prices. Know your price targets for both buys and sells. Be patient and invest only in the strong companies that can provide both a solid growth story and earnings that can beat on a quarterly basis.
DOW ended down .13%, the Nasdaq was down .74%, and the S&P 500 was lower by .40%.
Apple (AAPL) was a drag on the Nasdaq and S&P today seeing some profit taking after their big earnings blow out and the stock coming down near the 50 day moving average.
Oil and Gold both ended lower. Oil down 6 cents to $104.87 a barrel and Gold fell 60 cents to $1,664.20 an ounce.