The U.S. economy shrunk more than expected, according to the Commerce Department. The U.S. saw economic contraction for the third straight quarter, a run not seen since 1974-1975. Analysts had expected the GDP to be down 4.9%, but the number actually came in down 6.1%.
However, there was a bright spot in the dim economic data. Consumer spending which accounts for approximately two-thirds of our economy rose 2.2%. This was good news considering that the consumer all but folded up their tents and spent nothing in the second half of last year. Helping spending was a significant jump in durable goods of 9.4%.
For today stocks are indicating a higher opening. Despite the swine flu news that the U.S. had its first death, stocks continue to shrug off anything that could put a damper on this rally.
I still think we need to be very cautious, however, I did add a new idea to the focus list. Avnet (AVT) is a company that distributes electronic parts such as semiconductors, computer servers, connectors and data storage products. The chart looks very constructive, as it cleared out its 200-day MA yesterday.
In the meantime, let’s have a great day…