(By Rich Bieglmeier) Stocks struggled to break-even on Tuesday, but buyers did manage to fight off sellers in the afternoon to avoid a moderately lower day of trading. It was the second day of successively lower volume as stocks try to fight their way higher.
Federal Reserve Chairman Bernanke did his best to spook the equity market with his speech, and question and answer session. Big Ben believes the fiscal cliff is preventing the economy from breaking out. He says the economy will go into recession if D.C. manages to flub negotiations. Bernanke credits an improving housing market for his tempered, but upbeat, outlook.
It was good to see bulls be more engaged than bears as the day wore on despite Ben Bernanke. It could be a sign that sellers have fatigue, for now. That could change this morning if Jobless Claims show a second week of skyrocketing applicants.
Wall Street expects to see 415,000 new claims following last week's alarming 439,000 post-election result. We would be surprised to see a number in excess of 415,000. iStock thinks a surprise in the range 405,000 could be on the table. Last week's result seemed out of place, despite Sandy's impact. Stocks could rally if a number under 400k is delivered.
The pre-market jobs news is likely to get stocks off to a fast start, in one direction or the other, and then volume should trickle to a drip shortly after lunch. Traders will join everybody else in the race for the door for the Thanksgiving holiday and Black Friday shopping.
We expect to hear anecdotal evidence of robust sales and incredible traffic on Friday. It seems to be the case every year. According to a survey of 5,000 consumers by Deloitte for its annual holiday survey shows that 63% of respondents say they will spend the same or more this year than last while 37% will spend less. However, more than half (51%) say they will do their shopping at discount stores; so, sales might be up, but margins could be lower. If the survey is accurate, then stores like Dollar Tree, Inc. (DLTR) could fare well in the weeks ahead.
We hope that all our readers and families have a safe and enjoyable Thanksgiving, see you Friday.