The market has bounced big time on the first trading day of the month 5 out of the 8 previous months this year. So this makes 6 big first day jumps. Is it a good predictor of what will be? I'll let the -6% loss on the market through August stand in testament to its lack of staying power. So why did it bounce? The biggest reason at the open was news of strong growth in China and Australia which helps to mitigate the worldwide economic slowdown theory. Then at 10am ET we got awesome news from the ISM Manufacturing survey which was well above estimates showing continued strength in this sector. So investors, at least for today, overlooked the weaker than expected reading from the ADP employment report which showed 10,000 jobs lost after several months of modest gains. That is a bad foreshadowing for the heavyweight August Employment Situation report on Friday.
On the one hand, I am unconvinced of the longevity of this upward move in the short run given all the pessimism still in the air. On the other hand, I do believe in the case for the Muddle Through/slow growth economy. That will lead to equity prices being higher by year's end as this becomes the prevailing economic/market outlook. So it's possible that today's move is the start of something more substantial. And that my friends is the trick with investing. It's not always so clear. A balanced portfolio that is prepared for the market to move in either direction is the right call these days until there is greater clarity. So don't get too long…and don't get too short.
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Today's Top Stories: Thursday- September 02, 2010
ZACKS RANK BUY STOCKS
- Aggressive Growth - Albany International Corp. (AIN) reported second-quarter net income of $7.9 million and earnings per share came in at 50 cents per share, blowing estimates out of the water, which were averaging just 37 cents. Read More...
Growth & Income - The Gorman-Rupp Company (GRC) 2010 Zacks Consensus is up by 9 cents to $1.26 per share in the last 2 months for an earnings growth of 15.6%. Similarly, 2011, is expecting 15.1% earnings growth. Read More...
Momentum - JinkoSolar Holding Co. Ltd. (JKS) share price is up more than 200% since its May IPO. With a 41% Q2 earnings surprise driving shares, this Zacks #1 rank stock has plenty of upward momentum. Read More...
Value - Sirona Dental Inc. (SIRO) for the fourth quarter in a row, surprised on the Zacks Consensus Estimate. Earnings per share were 65 cents compared to the consensus of 50 cents. Read More...
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