After two days down for Wall Street, the market bounced back but it wasn’t a big bounce with some economic news slightly disappointing investors.
Technical people were impressed that the S&P 500 did not even look like going through 875, which is an important resistance level.
On the economics front, initial jobless claims rose by 32,000 last week to 637,000. The analysts were tipping it to go to 610,000. Belief in the recovery won’t solidify until the jobs number improves significantly.
Against this, Wal-Mart reported first-quarter earnings in-line with expectations, which is a good sign given how significant this retail outfit is.
Another negative for the market was Chrysler, which revealed it would close 25% of its dealerships. This will have a jobs effect, which will affect the recovery.
Locally the housing sector is responding to Government stimulus. Rob Mellor of BIS Shrapnel says a housing comeback is the first stage of a broader economic recovery. This is from Craig James at CommSec: “[Yesterday] we saw new lending commitments soared by 12.9% in March, the third gain in lending in four months and the strongest increase in 21 months. Commercial lending went up by over 20% in March. Housing lending lifted over 7% in March with loans to build new homes at record highs. Loans to buy blocks of land also hit record highs with renovation loans near three-year highs.”
The Oz dollar is up to 76.02 and continues to track Wall Street.
Have a good day,
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