Opening Market Commentary For 03-27-2014
Premarkets were down ~0.12% on the average and made a dip when the it was reported the US Economy grew at an annual rate of 2.6% and US Jobless Benefits fell slightly.
Markets opened flat and in the red as mediocre volume signaled that investors were unsure what to do next. Within 5 minutes the SP500 was testing the 1847 support but above the all-important 1839 support. By 10 am the Large Caps has eased back above the support levels while the small caps (NASDAQ) remained solidly below its support (now resistance).
The small caps are trending down as can be seen in this daily NASDAQ chart. The blue line is the 50 DMA and the red line is the 200 DMA.
(click here for larger image)
The Q4 GDP actually misses expectations and the Initial Jobless Claims drop to a 4 month low, but the markets are looking at good news as bad news.
US economy grew at 2.6 pct. rate in Q4 as consumer spending rose faster than thought
WASHINGTON (AP) – The U.S. economy grew at a 2.6 percent annual rate in the October-December quarter, slightly more than previously estimated, as consumer spending rose at the fastest pace in three years.
The Commerce Department says the fourth-quarter growth rate was a bit stronger than its 2.4 percent estimate made last month. The revision reflected stronger consumer spending, which rose at an annual rate of 3.3 percent – its best quarterly pace since 2010.
Even with the upward revision, growth in the overall economy slowed from a 4.1 percent pace in the July-September quarter. Analysts think growth has slowed even more in the current January-March period to around a 2 percent annual rate. A harsh winter has disrupted factory production and kept people away from shopping malls.
Applications for US jobless benefits drop to 4-month low, sign of an improving job market
WASHINGTON (AP) – The number of people seeking U.S. unemployment benefits fell 10,000 last week to a seasonally adjusted 311,000, the lowest since late November and a hopeful sign hiring could pick up.
The Labor Department says the four-week average of applications, a less volatile measure, fell 9,500 to 317,750. That is the fourth straight drop and the lowest level in six months.
It brings applications in line with pre-recession levels. The sustained decline suggests companies are confident enough about future growth to keep their staffs. Applications are a proxy for layoffs. Greater business confidence can also lead to more hiring. About 3.3 million people received benefits in the week ending March 8, the latest data available. That was about 43,000 fewer than the previous week.
