EmailThe stock market stuck to its winning ways on Wednesday, overcoming some initial profit-taking interest and pushing further into record territory. We said yesterday it wouldn't be a surprise if there was an inclination to buy the dip, and, well, there was most certainly an inclination to buy the dip.
The gains weren't significant, but they didn't have to be to connote the underlying bullish bias. Going into yesterday's session, the S&P 500 had advanced 5.5% in the last two-and-a-half weeks alone.
This morning, we are seeing a bit of softness in the futures trade. The S&P futures are down about two points and are trading 0.2% below fair value.
That indication is somewhat consistent with the behavior of foreign markets, many of which have slipped modestly Wednesday on profit-taking activity.
South Korea's Kospi Index was an exception. It tacked on 1.2% after the Bank of Korea -- wait for it, wait for it -- surprisingly cut its key lending rate 25 basis points to a record-low 2.5%. Why not? Everybody's doing it.
Okay, maybe not everyone. The Bank of England left its key rate unchanged at 0.50%, which was already a record-low level. The bank's asset purchase program was also left unchanged at GBP 375 bln.
China reported a higher-than-expected 2.4% year-over-year increase in April CPI and a weaker-than-expected 2.6% year-over-year decline in April PPI. It was a peculiar divergence that might prove problematic for policymakers since there is inflation on the one hand due in large part to high food prices and deflation on the other hand due it seems to excess capacity.
Of course, it is not unusual for there to be some extra head scratching when China releases its economic data.
Moving on, there isn't a lot of head scratching with the latest weekly initial claims report. It was pretty much more of the same, as claims for the week ending May 4 dipped by 4,000 to 323,000. That was better than the Briefing.com consensus of 336,000 and reaffirmed that the pace of layoffs has indeed slowed with businesses apparently content with the current size of their workforce.
The lingering issue, though, is that their desire to hire more workers has been tempered by the uncertain demand outlook.
Continuing claims for the week ending April 27 fell by 27,000 to 3.005 mln (Briefing.com consensus 3.019 mln).
