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Employment No Longer the Big CatalystCurrently, the market seems to looking beyond the reality of the labor market and is focused on housing data and construction spending. The employment situation is getting worse, but, quite surprisingly, investors seem to be ignoring this reality. I can only surmise that the high volume of cash sitting on the sidelines is responsible for the current buying activity in stocks. Investors have decided that a bad employment situation is a known expectation and they are now looking beyond this factor. I still think that the current interest in stocks is due mostly to the oversold situation in the market early in March. Right now, some investors are buying because the rate of bad news is slowing -- even if only slightly. This is perfectly illustrated by the Institute for Supply Management's latest manufacturing index. According to the data, for the 14th straight month, the manufacturing sector has contracted, but just last month, the rate of that contraction slowed a bit. According to the Institute, its manufacturing index rose to 36.3% last month, up slightly from 35.8% in February. A reading below 50 means a contraction in the industry. So I think that the market wants to latch onto any good news, even though that news still doesn't represent growth. There is continued good news for the economy and consumers, because the price of a barrel of oil is holding under the $50.00 per barrel level. This is an added bonus to the marketplace. I don't have any defined sense as to where the current stock market is headed. Rationally, I still expect another major pullback in stock prices and that the current action in stock prices is still just the continuation of a bear market rally. Profit Confidential --- http://www.profitconfidential.com/ LOMBARDI PUBLISHING CORPORATION News, Analysis, and Information Services Since 1986. One Million Customers in 141 Countries. Lombardi Publishing Corporation Financial Publications Division 350 Fifth Avenue, Suite 3304 New York, NY 10118-3304 --- Copyright 2008; Lombardi Publishing Corporation. All rights reserved. No part of this e-newsletter may be used or reproduced in any manner or means, including print, electronic, mechanical, or by any information storage and retrieval system whatsoever , without written permission from the copyright holder. Source: Free Articles from ArticlesFactory.com
ABOUT THE AUTHORMitchell Clark, B. Comm., Senior Editor at Lombardi Financial, specializes in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for eleven years, is currently authoring a book on how to pick small-cap stocks for maximum profits. Prior to joining Lombardi, Mitchell was a stock broker for a division of one of the largest financial institutions in North America.
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