Despite an early morning sell off to start the week, a late rally managed to support the major indexes, which eked out a small gain for the day. A gain is a gain, and it’s amazing to me how much resistance the market has shown.
Helping yesterday’s cause was a bullish report on new home sales, with the sales rate suggesting that this area has bottomed. Of course, these numbers were so bad in the past that now anything “less bad” is cheered as a turnaround in the making. To me, housing in general has a long way to go, before it can be called a recovery of some sort.
Fed chief Bernanke staged his first town hall meeting this past weekend and was quoted as saying:
“The silver lining in this whole thing is that people are starting to save more, since they saw what happened with 401k investments,” Bernanke said. “People are adopting good habits, so not only will we back on track, but the economy will be stronger than it had been before this started.”
While saving more is indeed part of the solution, I fail to see the previously spread logic via stimulus packages to get the consumer spending like he did in the past. Is the Fed now singing a different tune or just trying to appease the public?