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Zacks #1 Stocks on the Move 05/23/2013

Company Name Symbol %Change
WESTELL TECH WSTL
6.67%
STEIN MART I SMRT
5.38%
ALLIANCE FIB AFOP
5.21%
DAWSON GEOPH DWSN
4.33%
MARRIOTT VAC VAC
3.27%
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Tactics that Work in Good Markets and Bad
 
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What the Heck Just Happened?

Not much noise from Europe Tuesday. So a slight bit more attention was focused on the US home front. With that investors shook off a weaker than expected Retail Sales report as stocks nearly erased most of the losses from Monday. The retail report clearly shows growth year over year. It just was not as strong as expected given the news of sparkling Black Friday and Cyber Monday results.

So just when stocks started to peak we got, what seemed to be, a solid Fed statement saying that the economy is modestly improving and there is no need for further accommodation. Sounds good, right? Well from that very moment stocks started to plummet.

How the heck did that happen? Because just like with the European situation, traders want a quick fix. They demand that the Fed stimulates the economy, even if not needed, to tip the scales in favor of stock ownership. So when they didn't get that... the selloff ensued.

Yet the Fed knows well enough that nothing is needed at this time. And appeasing traders is generally not good policy for the long haul. So hopefully rationality is restored to the markets soon so Santa can pay us a little visit to end the year on a more festive note.

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Best,

Steve Reitmeister
Executive VP, Zacks Investment Research

 

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Steve Reitmeister
Executive VP, Zacks Investment Research

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