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Stocks move higher in holiday shortened session

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Stocks move higher in holiday shortened session

Stocks in the US moved higher despite news that the Portuguese finance minister resigned pushing the EU back into political uncertain and watching yields soar more than 100 basis points to 7.40%.  Stocks in Europe declined on the news with the Portuguese index declining more than 6% and the CAC and the DAX experiencing significant headwinds.

Automatic Data Processing reported its estimate for private sector jobs.  The Consensus was 160k vs. 135k in May.  The actual released showed a whopping increase of 188K jobs with a minor revision of -1K in May.  Construction was the largest contributor showing that the housing market in the US is continuing to gain traction.  The solid number could spill over into Friday’s non-farm payroll which would help bring down the unemployment rate which is a key gauge for the Federal Reserve.

Higher oil prices could begin to dent confidence in the US stock market despite better than expected economic data.  Oil prices moved above the $100 dollar a barrel level on Tuesday, which could spill over into pump prices and erode consumer spending.

The July 4th holiday in the US has created a gap in the calendar so initial weekly jobless claims was reported on Wednesday, with consensus was 345k vs. 346k the previous week.  Claim came in at 343K which was slightly better than expected.  Lastly, the ISM non-manufacturing for June rounds out the economic data coming in at 52.2 compared to 54.0 that was expected and a 53.7 in May.

The Dow Industrials was the best performing US index, moving higher by 56 points, but well off the session highs.  Prices ran into resistance near the 50-day moving average.  Momentum is gaining strength with the MACD generating a buy signal where the spread crossed above the 9-day moving average of the spread.

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