Market Wrap-Up for Jan.4 (C, HRL, MSFT, ABT, GLD, more)
This morning’s employment data didn’t really paint a succinct picture for those who may have been betting on a particular reaction. Remember, though, the official unemployment data omits a growing number of individuals who have been out of the workforce for over a year. According to the Labor Department, that number is over 3.3 million, up from 2.5 million just five years ago. How much this effect will really matter in the end is one of many data points we consider as we contemplate the direction that the economy and ultimately the markets will take.
Looking at the markets today, we saw sideways action early on, but by the close investors decided to pick up some more shares as the S&P hit 5-years. On the earnings side, fertilizer play Mosaic (MOS) gained after the company made some bullish notes about 2013. Finish Line (FINL) shares are had the opposite reaction after management gave a cautious feel for 2013 numbers.
Wall Street analyst upgrades helped move stocks like Hormel Foods (HRL) and Citigroup (C) higher. On the flip side, we saw Microsoft (MSFT) and Abbott Labs (ABT) shares trailing on some cautious analyst notes. Gold (GLD) prices took a big hit this first week as did bond investors with interest rates spiking.
Almost Everyone Wants to See Higher Markets
Unless you are a short-seller by trade, the inclination and position most investors and traders take is for higher prices most of the time. The media, as we all know, is no different. They will bite on getting viewers with potentially scary economic headlines, but for the most part, business media skews their stories to the positive side of things. The powers-that-be in Washington and around the country run their platform on criticizing their opponents, but once they’re elected, the focus switches to talking about how great things are during their term. It’s quite the tricky environment to navigate through.
Active traders are kind of the same when you think about it. When they are in the markets, all is well with the data they are seeing and hearing, but when they are not, things are getting worse. The trouble with this practice is that it tends to change on a daily basis.
Every day, we have to parse through the latest data points and figure out exactly what is being reported, and how the market sees it taking shape over time. Anyone that has been in the markets for a while has seen the worst of news being priced in and vice-versa, when good news eventually gets sold off — often times catching investors, new and experienced, off-guard.
Looking Toward Next Week
Looking ahead to the next week for stocks, we will start to get our first glimpse of earnings numbers for the first quarter out of companies like Alcoa (AA), Monsanto (MON), and Wells Fargo (WFC), just to name a few.
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