S&P 500 May 2012 U.S. Performance Closing In On Flat For Year, Home Builder Sentiment Hits 5 Year High:
U.S. housing data didn’t help equities much today as investors ignored this information and maintained concerns about Greece leaving the euro and trades at JP Morgan. The trading day got worse when news was revealed late in the day that more negative information was released about Greece.
Home Builder Sentiment Hits 5 Year High
The National Association of Home Builders/Wells Fargo index of home builder sentiment was released today and it rose to the highest level in 5 years. While the data came in higher than expected, the reading is still well below the 50 mean that suggests expansion and the traders largely ignored this key piece of economic data.
The downward trend in U.S. equities had already begun earlier in the day and no strong buys seemed interesting although JP Morgan was up after falling since the announcement it lost $2 billion in 6 weeks. The increase did little to help the overall sector with the financial ETF $XLF continuing to decline today. The Dow Jones Industrial average is up around 2.5 percent for the year with the S&P 500 now up slightly over 5 percent. The S&P 500 is flat at .33 percent in the last 3 months.
Positive economic news is secondary to headlines from Europe and the eventual breakup that is set to occur. We believe longer term, the regional decoupling will make it easier for capital to discern between good and band national economies which lets capital avoid risk. Short-term pressure keeps hitting the overall market with the S&P 500 hitting negative in the last 3 months while market leaders fall further.
Jobless Claims Watch May 2012
Reaction to negative sentiment related to Europe, and initial jobless claims on Thursday will help determine which direction the market could be moving in medium term. The downward trend in U.S. equities may give way to near-term rangebound trading after gold and commodities find support levels.