Markets Today

S&P 500 found new 2009-highs last week amid growing concerns of economic recovery and strengthening dollar. On Monday, it touched a critical level of 1113.69, highest since October 2008. Tuesday however, after the producer price index data was released at 8.30am, sellers redoubled their efforts preventing S&P finding new year-highs. Increasing oil prices boosted the PPI but the core PPI surprisingly had a sharp decline. The increase in energy and commodities kept the pressure for inflation.

At the bottom of the hour on Tuesday another important data, the industrial production data came out. Industrial sector slowed down in October. The consensus was a 0.7% increase yet the actual numbers came to 0.1% which is much lower than the prior 0.7% increase in September suggesting the overall economic recovery being in tact yet on a slower pace.

Housing starts also surprised the investors. It unexpectedly dropped 10.6% in October. The numbers came in much lower than the consensus. The main laggard was the multi-family starts which slipped 34.6% but the single-family also slid over 6%. Meanwhile, the first-time homebuyer tax credit has been extended, therefore we might see an upward trend for single-family purchases.

Several important data will be released next week. In our calendar for the following week, we have GDP, Durable Goods Orders, Personal Income and Outlays, Jobless Claims, Consumer Confidence and Consumer Sentiment.

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