« Wall Street Begins Campaign to Thwart ‘Populist Overreaction’
Michael Jackson Dies BREAKING NEWS! »

U.S. Stock Rebound Needs More Than Surprises: Chart of the Day


stock_rebound

By David Wilson

June 24 (Bloomberg) — “Concrete evidence that the economy is out of recession” is essential for U.S. stocks to extend their three-month rebound, according to Barry Knapp, a strategist at Barclays Capital.

The potential for a recovery has gained “widespread acceptance” by economists, investors and traders, Knapp wrote two days ago in a report. Because of this, economic data has become less likely to surpass estimates, he added.

The CHART OF THE DAY compares Westpac Banking Corp.’s index of so-called positive surprises, based on economic data for the last eight weeks, with the Standard & Poor’s 500 Index. The report included a similar chart.

Westpac’s index shows the percentage of U.S. statistics that exceeded the average projection in Bloomberg’s surveys of economists. The indicator peaked at 60 percent, its 2009 high, in the week ended May 1. This month, it fell below 50 percent.

“The most likely part of the economy to show upside momentum is manufacturing,” Knapp wrote. He singled out today’s report on May durable-goods orders as the best candidate to show the recession that began in December 2007 may be ending.

Orders for durables, built to last three years or more, rose 1.8 percent. The average estimate from a Bloomberg survey called for a 0.9 percent decline. Excluding airplanes and other transportation equipment, orders rose 1.1 percent last month rather than falling 0.5 percent as anticipated.

[Digg] [Facebook] [Google] [MySpace] [Reddit] [Technorati] [Twitter] [Yahoo!] [Email] More »

This entry was posted on Thursday, June 25th, 2009, 12:58 am and is filed under Stock Market. You can follow any responses to this entry through RSS 2.0. You can leave a response, or trackback from your own site.

  1. No comments yet.
(will not be published)
  1. No trackbacks yet.