By InTheMoneyStocks.com on February 24th, 2010 12:03pm Eastern Time
After the Consumer Confidence numbers came out at a pathetic 46 from 56.5 last month, many began to wonder where the disconnect was? The President and his economic team have said the economy is on the road to recovery while many firms on Wall Street have reported stellar earnings. Yet the consumer apparently is having a major drop in confidence. This news was released at 10:00am ET yesterday.
Fast forward to today. At 10:00am ET New Home Sales were released. The markets once again sold hard as New Home Sales came in down 11.2%. This was a record low. So what is really going on here? Where is this recovery?
Sad to say, but the recovery seems to be purely stimulus based and even that is faltering. Could we be heading towards a 20 year period like Japan has had? While people say, "no, this is different!" It is mostly likely the same. Human nature does not change and in general we do not learn from our mistakes. Japan tried many stimulus plans just like we are now. They failed to ultimately have an impact.
They can pump as much money into the economy as they want, running our debt sky high, but bottom line is, without jobs, without confidence, this economy will not recover. I hate to say it but sometimes the hard path is the shortest. It is time this country sucks it up and takes the pain. Sharp pain for one or two years then pleasure is much better than dull pain for 20 years in my opinion.
My analogy would be this. Think of a boat with just too many holes in it. You can bail out the water as fast as you can, but you are going down either way. Better to let it sink and swim for shore I say!
While the bad news has flowed the last few days, the markets are actually up nicely on the back of a collapsing dollar. The dollar is getting hit and that is sending the markets higher. Remember, the dollar is everything in this market. No matter the news! If the dollar is down, the markets will be up. Simple as that!
Lennar Corporation (NYSE:LEN) is trading down on the day though well off the lows. It is lower by 1.5%. Toll Brothers, Inc. (NYSE:TOL) is also trading down but far off the lows. It is just down .75%.
Technology is rebounding today headed Apple Inc. (NASDAQ:AAPL) up 1.6.%. Financials are also helping the markets move higher with JPMorgan Chase & Co. (NYSE:JPM) up 2%.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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