Market Talk

"Now...if I only had some green shoots to munch on..."

Another successful day for bulls, but certainly far less frenetic than yesterday’s rally. Some promising data in April pending home sales provides a supple tone for some modest gains, though trading was range-bound and pretty choppy through most of the session.

Could be some overbought fatigue setting in, so it’s hard to say what might motivate bulls to press this thing higher. Jobs come into sharper focus with tomorrow’s ADP estimate on May employment, precursor to Friday’s government NFP reading. Continue reading…

From Newswires reporter Ed Welsch:

Driver unhurt, but wait till he gets the bill!

The economic effect of the bankruptcies of GM and Chrysler may not be as dire as you think.

In all, it will result in about another 400,000 workers being added to the list of the unemployed through 2010, with slightly more than half coming from the auto suppliers, according to an estimate by Goldman Sachs.

That’s a rough average of 22,000 a month – a lot, but considering that the average job losses from the auto sector averaged 18,000 a month over the last year, the increase isn’t much compared with the trend already in place. Continue reading…

Tough Act To Follow

US stocks hewing to a fairly tight range today as bulls take a rest — who can blame them after yesterday’s fiesta. Consumer staples and health care the best performing sectors today, suggesting trading has turned a shade more defensive.

DJIA has been hemmed inside an 94-point range from session high to low so far. Final hour could get interesting.

Treasurys have eased back after an overnight bounce, with yields pressing back toward yesterday’s levels. US dollar also remains weak, and you have to wonder how long equity investors can watch those other two assets sink and not get the jitters.

Two historical comparisons that make the market look overbought, from Gluskin Sheff economist David Rosenberg: since 1950, the S&P 500 has never surged more than 40% in advance of a recession ending, but that level was breached yesterday — and most would agree that the recession isn’t over yet.

And, since 1950, by the time the market had risen that far from a bear market low, the economy was typically nine months into a recovery.

“So even if the consensus is correct that the recession ends by September, the market right now is trading where it would ordinarily be in May 2010. What are we going to do for an encore?,” he writes.

(Ed Welsch contributed to this report.)

April pending home sales rise for the third month in a row, jumping 6.7%, which marks the biggest monthly jump in eight years, according to NAR.

But more importantly, the index was up 3.2% year-over-year, which certainly marks a step in the right direction for the housing market, FusionIQ CEO Barry Ritholtz writes on his blog.

“Take the [data] up three months in a row, and the positive annual change as a positive incremental improvement,” he says. “Not the beginning of a new bull market for houses, but a potential sign things are stabilizing.”

Continue reading…

Newswires’ Geoffrey Rogow reports:

The Dow briefly erased all of its ills for 2009, rising as high as 8787 after better-than-expected April pending home sales.

At its lowest point, DJIA was off 25% YTD.

“We are now at the exact same market position as Dec. 31,” said Elizabeth Miller, president of Summit Place Financial Advisors. “But we are looking at those similar levels from a much healthier point.”

Continue reading…

US stock futures are relatively flat premarket, suggesting bulls may be ready for an early breather when regular trading gets underway.

Looks to be some profit-taking in European markets. Commodities have calmed a little overnight (oil’s down a bit) after some torrid action yesterday, and Treasurys have bounced some following Monday’s selloff.

April pending home sales due at 10:00am. May auto sales figures set for release today. Dallas Fed’s Fisher scheduled to speak this afternoon.

S&P futures up about a point; 10-yr higher, yield at 3.64%.