Planet Wealth

That's Greece as in the country, not "Grease" as in the play.  Blow-out earnings from the likes of AMZN, MSFT, our SNDK and even the launch of the AAPL iPad have not been enough to move the market higher.  We had a huge GDP report this morning, showing the economy grew 5.7%, which is the highest growth rate since 2003 which did move the futures higher.  That was then piggybacked by the Chicago PMI coming in at a higher than forecast rate of 61.5 (57.4 expected).  A reading above 50 indicates growth in the midwest region.  Even the Michigan sentiment survey came in higher than expected.  All that positive news sent the futures soaring and the market opened to the upside running into the theme of late, sell into the rallies.  The S&P came close to 1100 before selling back.  So what is going on?  Why is the market selling with all this good news?  First of all, it is important to remember that the market looks ahead and all this good news was already priced in with the recent rally.  Looking deeper into the GDP report reveals that more than half of the growth was simply inventory rebuilding as companies are expecting the economy to improve and allowed inventories to fall significantly during the recession.  Obviously, the economy cannot continue to grow at that rate without the creation of jobs.  In other words, the market is viewing the GDP as a "one-off" reading and cannot be sustained.  We have all of the recent rhetoric coming out of Washington that spooked the market, although starting with the "State of the Union" address there is more and more talk about tax incentives for small business.  Let's all hope that it's not all talk and some of those policies are put into place.  That would certainly go a long way towards making the market feel better about potential long term growth.  The main concern right now however, is Greece.  There are rumours that Greece is looking to the EU for a "bailout" of sorts, althought Greece denies it.  The market has not forgotten how it got burned when the first hedge fund failed in London at the start of the sub-prime meltdown.  The real concern is that what is happening in Greece could spread further into the EU.  The close today will be very, very interesting.