The market opened lower largely in response to disappointing retail sales numbers and the typical angst that comes with this most unloved rally. Despite across-the-board misses, retail in general is ahead of last year and there are some signs things are getting better. Of course, that's the challenge. Are things really going to get better into the second half of the year, or fade like all the other years in this "recovery?"
Redbook (monitors, analyzes and explains trends in retail sales and the consumer economy)
- 4-week sales +4.1% from sub-3.0% growth through March
- May sales +1% over April
- Optimism is growing into Memorial Day
We're off the worst levels of the session, but mostly meandering, as investors await comments from the Federal Reserve officials. There should be no surprises, but I guess that's the origin of surprises in the first place.
William Dudley is a dove and Charles Plosser is a hawk; how their paths meet today could be with both agreeing that the tapering of QE should continue. However, the former wants rates to stay low forever while the latter probably already knows that the damage planted warrants a swift retreat.
I'm feeling good about how this market is acting. I must say, I only saw a half dozen articles of impending doom this morning...I prefer to see more, really. Valuations, enthusiasm and reckless abandon are nowhere near historic levels for the next crash. Sadly, however, it's a moot point for those fence-sitters that have missed it all and swear they'll step up to the plate after the moment of truth.
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I respect that there hasn't been a 10% correction for some time, but our work points to a move to 18,000 on the Dow before that fateful day.
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