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Rising construction spending and expanding activity in the manufacturing sector are the latest signs of a US economy that is moving onward and upward.
The only problem is that good as the economy is looking, the performance of the stock market has been even more stellar, to the point that investors are perhaps beginning to question whether valuations have outstripped the fundamentals.
We’re likely to get a better read on that in the next earnings season, which kicks off in a week’s time with Alcoa, but for the time being, sellers have been dictating the direction of the market today in New York.
With less than hour to the close on Wall Street, the Dow was down 0.74% (122 points) at 16,454 and the S&P 500 was off 0.80%. While the S&P had bounced off its lows of the day, this is still a steep drop without any obvious catalyst beyond investor caution.
Money being taken out of the market to take advantage of record prices is no ground-shaking thing, and it is in the market’s performance over the next few days, or weeks, that we’ll be able to get a sniff of whether this is merely a bout of profit-taking or the start of a larger trend.
US macro-economic reports are a little thin on the ground tomorrow, although we do have oil inventory data from the US energy department, and there are a number of Fed officials delivering speeches, which always has the potential to move the market.