April 30, 2010

Monster Market Update:

U.S. consumer spending rose at the fastest rate in three years in the first quarter of 2010, powering the economy to a 3.2% growth rate, the Commerce Department estimated Friday.

GDP is up 2.5% in the past year, following the worst downturn in generations. GDP rose at a 5.6% pace in the fourth quarter, primarily because of inventory reductions.

There were significant weak spots in the mix of growth in the first quarter. Real disposable incomes were flat. After rising in the third and fourth quarters, investments in homes reverted, falling at a 10.9% annual rate. Investments in business structures dropped at a 14% rate, the seventh straight decline. Spending by state and local governments fell 3.8%, the largest decline in 29 years. Export growth slowed.

Signs of an improving domestic economy have pushed stocks higher the past two days, after fresh concerns about European debt problems sent shares plummeting on Tuesday. The Dow jumped 122 points Thursday, its biggest jump since March 5, after another batch of strong earnings and a Labor Department report that showed initial claims for jobless benefits fell last week.

Despite the gains the past two days, investors are still keeping an eye on the European debt problems. The biggest concerns are in Greece, where the country faces loan repayments in a couple of weeks. If it is unable to tap a joint European Union and International Monetary Fund bailout package before May 19, the country could default on its debt.

Meanwhile, bond prices traded in a narrow range. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.74 percent from 3.73 percent late Thursday.

Monster Weekly Portfolio Review:

This week we were faced with a few obstacles – Europes debt concerns and Goldmans hearing.  Both events made for a tough week of trading and depending how we perform today will decide whether or not we have our first losing week in months. JASO is looking strong in premarket and HMA could make another move higher today. 

This week we managed to book only two winning trades (cvgi & byd) and we had four losing trades (FTBK, EK, LPX, & IRE).  In total we are down about 12% for the week when deducting our 4 losses from our winners, again not a very productive week.  However, the portfolio is stabalizing and now we are catching up from the beaten the markets took at the beginning of the week.

We’ve isolate a few positions we absolutely love here but will be patient and wait to see how the market trades duing its first hour today.  The markets are setting up nicely for some quick trading moving forward which excites us.  Be ready for updates.