Stocks Digest Fed Meeting, Retail Sales, & PPI Data

Tuesday, December 14, 2010
Stock Market Commentary:

Stocks rallied as the USD fell and China said it will hold rates steady even though inflation is accelerating. Market internals remain healthy, evidenced by an advancing advance/decline line and an expanding number of stocks reaching new 52-week highs.

Retail Sales & PPI Rise; Fed Meeting:

US retail sales topped estimates and in November as holiday shopping began. The stronger than expected report was a welcomed sign and bodes well for the ongoing economic recovery. Elsewhere, the Labor Department said the US producer price index (PPI) rose last month by the largest amount in eight months due to higher food and energy prices. The PPI rose +0.8% from the prior month after a +0.4% rise. Core prices, which exclude food and energy, rose +1.2% from the same period last year which was the smallest increase in five months and matched estimates. At 2:15pm EST, the Federal Federal Reserve decided to hold rates steady and largely reaffirmed their recent stance on the ongoing economic recovery.

Market Action- Market In Confirmed Rally Week 16

It is encouraging to see the bulls show up and defend the 50 DMA lines for the major averages. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. Put simply, stocks are strong. Trade accordingly. If you are looking for specific high ranked ideas, please contact us for more information.

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