Dec 1st 2014 – No Running For The Exit Just Yet

Last week I said that my expectation for the S&P 500 would be a turnaround at 2083-2085.  Nothing has changed my opinion of that, even given the news led dip today.  Reports out of China showed a contracting in manufacturing and the reading of weekend US Black Friday sales were down versus previous years.

However, retail sales are now approaching 15% for online shopping and that is continuing to increase.  Also, more stores are promoting “Black November” rather than “Black Friday”.  Stores have been in sales mode for the month, or at least a week leading up to Friday’s extravaganza.  So I think this will be taken on board in the coming days and we will see the market rise from here.

Of course, like the positive ISM factory data that beat expectations today, any positive data including the jobs report on Friday would help us get there.  This may indeed be a significant pullback, but I think it is more likely a blip, so until I get a signal for the end of this trend, I am staying long with an expectation of more to come.

Market News:

U.S. stocks declined on Monday with investor concern about a lackluster start to the holiday shopping season partially offset by data that had a measure of U.S. factory activity slowing less than expected in November.

Stocks cut their losses after the Institute for Supply Management said its national factory activity index dropped to 58.7 last month from 59 in October, with the latest figure beating expectations of 57.8.

Americans spent about 11 percent less during the long holiday weekend ahead of Cyber Monday’s online sales, according to survey results released Sunday by the National Retail Federation.

Markit’s final November manufacturing Purchasing managers’ Index for the euro zone was 50.1, its lowest level since June 2013.

China’s official factory index dropped to 50.3 for November, while the Markit index had it at 50.

Tuesday:

Earnings: Bank of Montreal, Bob Evans

Monthly car sales

10:00 a.m.: Construction spending

News Sources:  CNN Money & CNBC