Like on weekend afternoons in the fall, all eyes will be on the scoreboard today to see if the market can close the week above the magic 10,000 mark. It’s not likely as news overnight was broadly disappointing.
- At the company level, GE reported lower-than-expected revenue and a big drop in profits, and Bank of America also reported greater-than-expected losses – two bell-weather stocks lots of people watch.
- Mortgage foreclosures continue to rise. They were up 23% in the third quarter compared to a year earlier and 5% worse than in the second quarter.
- And the latest industrial production numbers just out, although strong for the third quarter, were disappointing as they continued to slow over the course of the quarter.
So the Champaign corks that popped 10 years ago when the market first passed 10,000 aren’t happening this time.
They won’t pop – and the market will not be sustainable – until some fundamental foundations are shored up: there are 3 key ones:
(1) The big one is job growth…that’s not happening yet
(2) The second is personal income growth that follows
(3) The third is confidence…or consumer moods
Until all three of these show signs of sustained improvement, any flirting with the 10,000 mark will be just that…It will be fleeting.
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