Odd? Retail sales drop and the dollar drops to the euro, while stocks hit a record high....

[Flabbergasted]

Associated Press
Stocks Soar to New Highs on Retail Sales
By TIM PARADIS 07.12.07, 4:58 PM ET

NEW YORK -
Wall Street soared Thursday, propelling the Standard & Poor's 500 index and Dow Jones industrials to record highs as bright spots among generally sluggish retail sales allowed investors to toss aside concerns about the health of the economy.

The rally, which included the Dow's biggest one-day percentage gain in nearly four years, was perhaps surprising given that there was no extraordinary announcement or other catalyst usually seen with such a huge gain, and that it came before most companies have announced their second-quarter earnings. The rise also marked a sharp contrast to the start of the week, when stocks fell sharply amid concerns that some hedge funds could succumb to ill-placed bets on the housing sector.

But investors, heartened by signs of a happy and spending consumer, clearly decided to put some bets on the table. Though retail sales generally appeared to be crimped last month by higher gasoline prices and a tepid housing market, and the outlook for the coming months was difficult to ascertain, the overall reading wasn't as dour as some investors expected.


http://www.forbes.com/feeds/ap/2007/07/12/ap3909638.html


Forex - Dollar stay under pressure on weak retail sales, sub-prime woes
07.13.07, 12:32 PM ET

LONDON (Thomson Financial) - The dollar turned in another dismal performance to end the week on a bitter note, with late US data doing just enough to pull the currency back from a record low against the euro.

The hapless dollar first sank under the weight of dismal US retail sales for June, which suggested consumer spending is starting to faded amid the ongoing housing crunch. Stronger than expected consumer confident data subsequently, helped blunt falls however.

Retail sales dropped 0.9 pct in June, the biggest fall since a August 2005's 1.5 pct, contrasting sharply with the consensus analyst forecast for a rise of 0.1 pct.

Even excluding autos, which fell 2.9 pct, June retail sales were down 0.4 pct as against the 0.3 pct increase economists were expecting.

The euro topped 1.38 usd after the weak data, setting a record 1.3813 usd. The 1.38 usd level had proved a tough resistance level but enough momentum built up within minutes of the data release.

BNP Paribas currency analyst Ian Stannard said the data were 'far beyond analysts' expectations on the downside' and have put the dollar back under pressure, adding to the ongoing subprime lending worries.

[BeatleBoot]

1. The Great Correction Cometh

And the Great Correction shall taketh away.

This fall perhaps.

October 1987? One can only hope its only that bad.

[Neshanic]

20. That is my thinking. Ups and downs, little and big, then the big drop in fall.

[greenbriar]

2. bush and co cheats at everything else

can they manipulate this as well?

[R_M]

3. The stock market is not the economy.

14,000 is unjustified seeing the current climate of stagnant wages, debt, and trade deficits.
It may drop back to 11,000 this fall.

[Hosnon]

5. Certainly not the U.S. economy. I think it more accurately reflects the global

economy.

[WinkyDink]

8. ITA. These companies aren't solely U.S.-oriented.

[Liberal Veteran]

4. I've noticed that GOOD economic news drives the stock market down...

...and BAD economic news seems to drive it up.

Oil prices rise: stock market goes up.

Retail sales slip: stock market goes up.

Unemployment goes down: stock market slumps.

There is a bizarre inverse relationship.

[WinkyDink]

9. The more workers, the more paid out in wages/benefits, and thus less to stock-holders. Bada-bing,

bada-boom!

[camero]

16. Yep

If the rich get richer, the rest of us get poorer. If the rest of us get richer, the rich get poorer. Money being a limited resource.

[phildo]

6. Not that odd -- you are just watching the debasement of the currency

While the US dollar is heading towards worthless, other currencies would appear to go up. e.g. the Euro. Same with commodities, and things of value, such as stock. In truth most are just holding their own, while the currency itself is dropping. Just makes them look like they are going upward if measured in dollars.

End game turns into losers anyone who is holding the dollar bills (they are actually debt). In full blown hyper-inflation, debt gets wiped out because it is paid back in ever more worthless money.

Fixed dollar income folks are totally screwed as the COLA numbers are now bs -- so it is a handy way of cutting benefits, as well.

[WinkyDink]

10. Fixed dollar income folks are totally screwed = me and my husband, retirees.

[phildo]

13. It is sort of stunt to wipe out the top folks' debts, and screw you -- if goes real bad it is called

Hyperinflation.

Might not, but we sure are set up for it.

Happens more times in more places that folks are aware of.

Short readable primer here >>>

http://en.wikipedia.org/wiki/Hyperinflation

The top end has already cleared the deck (of the Titanic) Bill Gates went with Euros, Warren Buffet, Silver and Euros as I recall. Perot with Yen. Different strokes and different lifeboats for different folks.

Everybody in 3rd class and stowage might have some problems.

[gizmo1979]

7. YesterdaysUSA Today

main business page headline read"Summer to be sunny for stocks"It went on to say that there is to much unused money out there and people are looking for places to park it.I thought the housing market is in the pooper forclosures are at an all time high and gas is through the roof,how can the market be so perky?

[WinkyDink]

11. It's being "parked" in, e.g., Dubai construction.

[SmokingJacket]

19. People are taking their money out of real estate, and into stocks. nt

[Robbien]

12. In sane days, the market was always sleepy over the summer

Now, the market is chasing all mergers/acquisitions of the private monied crowd and the hedge fund betting crowd. It is totally disinterested in real world activities.

[1932]

14. I think money is coming out of real estate investments and flooding the stock market

[Snarkoleptic]

15. Too much money is chasing too little value.

A correction is imminent.
A weak dollar makes it less expensive for those holding other currency to invest in the USA.
This has pulled a lot of money into our stock markets.
Funds have also been steadily pulling out of US real estate and into the stock market.
A common flaw in many investment strategies is that people buy stock as though they're 'voting' for a company and it's future success.
It's essential to look at the big picture and also consider the P/E ratio.

[moondust]

17. Do you happen to know

what "average" P/E ratios look like right now? Know of a good link to this sort of broader market info? Thx.

[BenDavid]

18. Same group of folks that are

doing the buying and the selling....I cannot believe all this hoopla about the stock market....Bush got the market at right below 11,000 and Clinton got the market at over 3000 and now bush is treated as though he accomplished something....Hell, it is easier to go from 11 to 14 then to go from 3 to 11.....oh and one other thing. it is easier to go to 4.5 unemployment when you got started at 5.2...clinton was handed 7.4 and took it below 4.5.....
I do thank you
Ben David