The combination of weaker than desired growth and signs of improvement in consumer spending are likely to keep the Fed cautious and lead to a very carefully staged month-to-month program of quantitative easing
The yield on the 30-year Treasury has moved back above 4%. The 30-year bond yield hasn’t been above 4% since early August and the highest yield then was just 4.05%
The headline number for durable orders (durable goods are things that last a while such as airplanes, trucks, and production equipment) for September released today showed a big jump to 3.3% growth. But the headline number isn’t as important as the 0.8% drop in durable orders minus transportation. Orders for nondefense capital goods, the stuff that companies buy so they can produce more stuff, fell by 0.6%.
Sell on the good news is normal after a rally like this; don’t let it spook you–by itself it’s not enough to create a correction
We’re starting to see stocks drop after companies report good earnings.That’s not surprising. In fact it’s over due after a rally like this one. The Standard & Poor’s 500 index is up 13% since August 26.
Inevitably after stocks have climbed so far so fast, some investors decide to take profits. But it’s easy to over-interpret these kinds of stock-specific dips and turn them into some kind of trend.