Trading Roundup

U.S. consumer confidence rose in June to the highest since February 2008, as expectations grew that the worst economic recession since the Great Depression may be ending. The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for June was at 70.8 from 68.7 in May. However, consumer expectations dropped from last month on rising job loss.

Incomes rose 1.4% in May, well above analyst estimates of 0.3%. This is a very good sign, as increased wages is the first step before business’ curb layoffs. However, savings increased at its largest rate since the S&L debacle, which now stands at 6.9% with consumer spending only increasing by 0.3% in the month.

It doesn’t matter how much people are making if they aren’t spending it to propel 2/3 of U.S. GDP and 19% of the world’s economy. The increase in the savings rate sent Wall Street lower as investor’s rightly so fear that a frugal consumer will delay an economic recovery.

Market Summary

By 4 PM Friday, most stocks fell on the street as a decline in energy prices sent the sector down 0.8%. The Dow Jones industrial average fell 34.01, or 0.4%, to 8,438.39, while the Standard & Poor’s 500 index fell 1.36, or 0.2%, to 918.90. The tech heavy Nasdaq composite index rose 8.68, or 0.5%, to 1,838.22. Technology was buoyed by smart phone maker Palm, who posted a narrower than expected quarterly loss. As a result, other makers in the same class, such as Apple (AAPL) and Research in Motion (RIMM) propelled gains.

Today market the close of an interesting week on the street, where we saw large advances and sharp declines, alongside sideways trading in between. The end result was the markets first two week decline since March.

Reverse Psychology?

What are the Chinese doing? Today, the nation’s governor came out strongly in favor of a world currency adding to speculation that China will diversify its currency reserves, the world’s largest at more than $1.95 trillion, sending the Dollar Index down 0.7 percent to 79.84. The last time I checked, why would they want an alternate reserve currency to weaken the return on their holdings?