"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Thursday, December 30, 2010

Good News Is No News, Apparently

We had good economic data today. First time jobless claims were good. The Chicago PMI was spectacular. Pending home sales, which I forgot about entirely today, were up 290 bps to a level of 92.2. So naturally, the markets heaved a sigh of disgust and slunk a short distance into the red to sulk (Dow down 15.67, NASDAQ down 3.95, S&P 500 down 1.90). All told, it was a day filled with "meh".
Why should this be? Well, a few things crop up. A lot of the big traders have already closed their books out on yesterday's marginal high note, which has cut liquidity in the market (which always causes volatility in prices). We've got a weak dollar, with investors expecting it to weaken even further as the Fed churns the money out. In fact, the dollar lost out against both the Swiss franc and the euro (which is kind of sad, as the euro also lost out against the Swiss franc).
All in all, it feels like much of the market has already taken off for the weekend.

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