Stock Market News: Are we Bullish or Bearish

What did the news say today?

• a more sizable than forecast pickup in home prices , solid corporate earnings, S&P Growth: Bullish
• a disappointing reading on consumer confidence: Bearish.

What do the news tell us today?

We are having an economic recovery with continues high unemployment. This was all seen in Europe and started there 30 years ago.  To cope with this problem Europe restructured and build a sound welfare system: When companies don’t employ people, they need to live from something.  This is sure unknown for America and seeing your neighbor unemployed for long even though he is skilled and willing to work makes consumers growing increasingly more pessimistic about the short-term outlook.

The consumer sentiment will change: Corporations will no more run layoffs and those who work will feel money to spend which will change their sentiment, but it will take.

The government has to restructure unemployment support, availability of health care and the taxation system to handle 10% unemployment in their balance sheet.

So short term we are getting ready for a bullish market sentiment and every time the government or Fed will touch one of the instruments they have to cope with the overall unemployment problem: interest, tax, healthcare, welfare. The market will go berserk and give us big junks of retracements.

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Here are a few more overall bullish market indicators. Today we take on the Chemical industry, it usually provides and early economic indicator and the sings are: Bullish.

DuPont (DD) reported adjusted second-quarter net income of $1.17 per share, firmly topping forecasts for $0.93 per share. Net sales for the quarter came in at $8.62 billion, also beating expectations that called for $8.23 billion for the period. The European based second chemical giant: BASF is doing as well or even better.

BP Plc (BP) unveiled a $17.2 billion second-quarter loss due to $32.2 billion in charges related to the oil spill in the Gulf of Mexico. The loss came after a profit of $4.39 billion in the same period last year. The firm also named managing director Robert Dudley as its new chief executive, replacing Tony Hayward, starting in October. Dudley will be the first American to head the company. From an investor perspective, BP assumes to get away within spending  about a 1 year income to clean up the oil spill generated and wants to get out of the news by replacing the CEO (sure we do not need to worry about him, he has a package that gets him over the hump).