Market Jumps Back over 50 Day Moving Average as Investors Predict More Easy Money

ISM Services came out this morning; unlike ISM Manufacturing on Monday which is just a fraction of our "new paradigm" economy (12%ish) - investors still seem to pay far more attention to manufacturing.   Meanwhile, services is now the dominant part of the US economy.  Again, taking *any* government data with huge grains of salt, ISM Services came in below expectation (yet still slightly expansionary) but the market could care less.

• Service industries in the U.S. grew in October at a slower pace than anticipated, a sign growing joblessness may restrain consumer spending.  The Institute for Supply Management’s index of non- manufacturing businesses fell to 50.6 from 50.9 in September.  The index was projected to increase to 51.5, according to the median forecast of 77 economists surveyed by Bloomberg News.

• (1) The ISM non-manufacturing gauge of new orders increased to 55.6, the highest level in two years, from 54.2 the prior month. (that's a positive) (2) The index of employment dropped to 41.1, the lowest level since May, from 44.3.  (that's a negative, at least if you think jobs matter)  (3) A measure of prices paid climbed to 53 from 48.8. (and that folks, is inflation and an offshoot of a weak dollar - bringing products into the country is getting expensive which will squeeze profits)
  
  


•  Mounting unemployment may mean consumer spending will only accelerate with government assistance, indicating the emerging recovery may lose momentum as stimulus fades.