Mixed Data,Thin Volume

The stock market edged up on Friday in thin trading,hindered by contradictory economic reports.While retail sales fell unexpectedly,consumer sentiment rose.Consumers may optimistic,but apparently not enough to break open their wallets.The positive University of Michigan sentiment reading of 75.5 was below those of previous economic recoveries.
Early season campers in Arkansas were victims of tragic flash floods at riverside campgrounds.At least 20 were swept away to their deaths,including children,and many more are still missing.Rescuers were doing all they could,but didn't even know exactly how many they were looking for,since campground registers were lost to the floods.One child was saved when snagged by a friendly tree limb.
In baseball,Boston was clobbering Philadelphia 12-1 as the National League champion Phillies continue to struggle,having tumbled out of first place.The S&P futures were up 5.50,and bond futures retreated.

Profit-Taking Today

Friday was a day for booking profits as investors expressed doubts about the economic situation.Reports suggesting consumer weakness raised the level of uncertainty about the course of 2010-enough to make taking profits a prudent measure at this time.Even Intel,with its sterling achievements in Q4,was skimmed for cream.JP Morgan Chase reported loan losses,and CEO Jamie Dimon expressed uncertainty about the economy in the conference call following its quarterly report.A disappointing reading by the University of Michigan on consumer sentiment further agitated the markets,raising the volatility level,although stocks did close off their lows for the session.The prospect of a three day weekend in the U.S. left traders eager to safeguard their portfolios with a buffer of cash in the face of a questionable opening on Tuesday morning and a cascade of further earnings reports next week,icluding one from Citigroup.

Shopping Season More Critical

This year,the holiday shopping season is even more critical than it usually is.The Reuters/University of Michigan's consumer sentiment index for October was released today.It showed a decline from 70.6 in September to 66.0.This does not bode well for consumer spending.Although earnings have been generally good to this point,a lot,but by no means all, of the success is down to cost-cutting.Companies have shown a remarkable capacity for increasing efficiency.At some point,however,the consumer is going to have to step up more than they have done so far.If not now,the biggest shopping period of the year,when?If they do not step up now,we are looking at the significant possibility of a stagflation scenario.That would overshadow the good spirits that have characterized the equity markets of late.One can only hope the pocketbooks will open in time to avert all manner of difficulty.