Daily Data Flow: Stocks Rise as Investor Optimism Increases; Dollar Rises Against Euro; Housing Market Rejuvenates
Stocks Rise as Investor Optimism Increases (Bloomberg)
Confident that companies will report better growth in the second quarter of 2013, investors propelled another rise in the stock market on Tuesday. Gold, wheat and several critical DOW companies like Caterpillar (CAT) and Bank of America (BAC) led the market. Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, explained the sudden optimism, “Expectations for second-quarter earnings had fallen quite a bit and we’re beginning to see that the downgrades were by too much. We could see some pleasant surprises in the earnings season.”
Dollar Rises Against Euro (Reuters)
Another blow to Italy’s credit rating caused the euro to fall even further against the dollar on Tuesday. At the same time, the dollar rose against other currencies with the news that the United States might reduce stimulatory spending, while other major countries increase it. As investors increase their bets in favor of the dollar, the bets did not reach the dollar’s May high, suggesting further upside. “This is momentum-driven trade and we are looking for more dollar strength,” said Mankash Jain, head of FX and Investment Management at Solo Capital. “Any bounce in the euro toward $1.2950 is a time to initiate fresh short positions.”
Volatility no more. According to the latest data from CoreLogic, fewer housing foreclosures were completed in May compared to a year ago, indicating that the market is rejuvenating, while the number of houses in the foreclosing process declined. CoreLogic mentioned that there were 52,000 foreclosures completed in May, well below the 71,000 mark it hit in May 2012. Prior to the housing market’s collapse, foreclosures averaged 21,000 a month between 2000 and 2006.