STOCKS GO NOWHERE: Here's What You Need To Know

sleeping black bear

Photo: China Photos / Getty Images

It was a quiet day.First the scoreboard:

Dow: 12,959.7, +37.6, +0.2%
S&P 500: 1,371.0, +0.2, +0.0%
NASDAQ: 2,983.6, -4.6, -0.1%

And now the top stories:

  • The stage was set for today’s trading session on Saturday when China said it recorded a huge trade deficit of $31.5 billion in February.  Investors should be careful as to how they interpret the headlines.  Jim O’Neill writes that the monthly Chinese economic data is noisy: “As always, given the variable timing of Chinese New Year, one has to be cautious about Chinese data in January and February, but adding them together is the straightforward way to look through seasonal distortions. If you do this, China is in deficit for the first 2 months of the year, which suggests, along with considerable evidence elsewhere, the sharp drop in China’s trade balance of recent years is for real, and sustainable as China adjusts to domestic demand.”  In other words the deficit is indeed high, but you shouldn’t get too overdramatic about it.
  • Energy and industrial metal commodities sold off today, bringing down stocks in those sectors.  Murphy Oil and El Paso Corp were among the big losers in the S&P 500.
  • Many of Wall Street’s top strategists have been boosting their targets for the S&P 500 in response to the monster rally we’ve experienced since the beginning of the year.  They include Bank of America’s Savita Subramanian, UBS’s Jonathan Golub, and Credit Suisse’s Andrew Garthwaite.  According to S&P’s Sam Stovall, six out of the 11 bull markets since 1945 have gone into a fourth year, and their returns average 12.5 per cent.
  • But there are also strategists out there taking the opposite side.  This morning, Goldman Sachs’ David Kostin said he was keeping his year-end S&P 500 target at 1,250, which implies stocks will decline from here.  His reasons included weak earnings growth and a stagnating U.S. economy.  RBC’s Myles Zyblock, who doesn’t publish a target, warned that bullish sentiment is getting stretched and that we’re overdue for a sell-off. SEE ALSO: Wall Street’s Sharpest Minds Predict Where Stocks Are Headed In 2012 >
  • On the more extremely bearish side is Jon Hussman.  Over the weekend, Barron’s published an article titled “Is This The Worst Time To Buy Stocks?” laying out Hussman’s five conditions which signal stocks could soon plunge.
  • Don’t Miss: OIL, CHINA, LIES, BIKE LANES: Jim Rogers Tells All To Business Insider >

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.