Welcome to September! In watching this morning's pre-market futures action, I was taken with how much of a jump there was in the Dow & S&P 500 futures, even in the face of bad economic news on the home front. Will one month change confidence that much? This morning's sour domestic economic news was that the latest ADP payroll survey reported that 10,000 jobs were shed last month. If we were still in August, that type of news might hammer the market because investor confidence remains weak over the economic uncertainty.
Instead, in a sign of just how global our economy is, encouraging reports out of China and Australia about economic growth there have propelled stock prices this morning. Perhaps this morning's rally, however short, signifies that longer-term asset buyers are returning to the market (we can only hope!)
While I shy away from making any calls on the attractiveness of assets, it's hard not to point out that right now, conventional wisdom is very negative in the equities markets - many people think stocks are likely to fall further from the early July lows we saw on the S&P. The P/E on the S&P 500 ETF, the S&P 500 SPDR (SPY), stands at 13 indicating the equities are cheap on that basis. So, what's my advice? Now is as great of a time as any to dollar cost average (DCA) into an index fund portfolio that you are holding for the long-term.