Daily Market Update – June 1, 2015 (Close)
After a week of absolutely no direction and no theme, there’s not too much reason to believe that this week will be much different.
Other than on Friday, when the Employment Situation Report is released, there’s really not too much scheduled news and the market could find itself going back and forth as it did last week.
This week appeared to be getting ready to get off on the other foot, though, as the pre-open futures was pointing moderately higher. That follows a week where the bias was to the downside and then cemented there as the GDP Report was released on Friday.
This week’s Employment Situation Report could put the FOMC in an interesting position in the event that employment data is strong, as it was last month.
Somehow they would have to deal with conflicting pieces of economic information in deciding whether there is sufficient and valid enough data to make a decision to raise interest rates. With the GDP indicating that the economy was shrinking more than expected, but in the light of job growth, you would have to scratch your head in trying to understand how those would be occurring concurrently.
I’ll let them work that out while I think about other things.
Mostly, that will be the usual kind of things. The only difference is that after last week of no new trades and only a single position needing a rollover, it would really be nice to do something more meaningful this week.
While I would like to see the cash reserve pile grow even more, I would like to add some new positions this week to complement the 3 positions that are set to expire this week.
It was nice, at least for now, to have added some new positions, all three of which had dividends in the equation. For now, I want dividends as an offset to risk.
While the early bias to start the week does look as if it will be higher, it’s still difficult to know what will be responsible for propelling markets higher. It’s also difficult to know just how the market will respond to news in general. Will they be disappointed by bad news, as was the case with last week’s GDP or would they be elated about bad news, as they would have responded about a month or so ago, to the very same news.
For the moment it appears as if the market is discounting a very small interest rate increase and is expressing disappointment with anything that might actually delay that increase. Last month the disappointment was if anything appeared to be accelerating that increase.
For its part, the bond market isn’t as effusive about rates going up sooner, rather than later, as it was just 2 weeks ago.
In essence, no one really has any clue as to what is next and how we will respond. But just to confuse things even more, the bond market returned to its belief that rates were heading higher and did so in a big way today.
This week, at least has a large number of ex-dividend positions to keep some income flowing in and in a small way maybe off-setting last week’s drought, but that represents passivity. Hopefully, there will be some good reason for actively pursuing some income and profits this week, without adding on too much risk in the process.