I'm worried we are holding stocks too long.
Wall Street Strategies (www.wstreet.com) subscriber
On Friday, the Dow Jones Industrial Average fended off weakness throughout the session to close at the high of the session and in winning territory. It was only 10 points higher, but was something of a miracle considering key names under huge pressure, including IBM which accounted for 100 negative points alone. I suspect part of the resolve was related to the broader emotional resolve of the nation as the Boston nightmare was swaying back and forth but closure felt near.
But, there is no mistake this was a rough week for stocks that now has many experts warning of the Spring Swoon.
The narrative is that the US economy has been slowing down each spring in a sort of new post-recession cycle. The interesting thing about this is the "swoon" has been more a stock market phenomenon than economic. I actually think talk of the economic swoon has exacerbated the stock market swoon. Make no mistake, the stock market swoons have been sharp and devastating.
The first quarter of 2012 saw 787,000 net jobs created in the United States, and the following three months only 324,000. The first quarter of 2012 saw GDP growth of 2.0% give way to a decrease of 1.3% in 2Q12. There is no denying the swoon was economically driven, but this isn't necessarily the case over the past three years where the first quarter has been the weakest.
As for job growth, while there is no doubt last year saw an enormous decline in jobs, the past three years have witnessed stronger additions in the second quarter than the first, with the summer time being the weakest period.
There was a springtime spike in initial jobless claims in 2011 but for the most part claims have drifted lower although lately are finding trouble staying below 350,000.