Dow Keeps Win Streak, But in Sour Mood

Strange close. Volume spiked dramatically in the last couple minutes. NYSE floor volume went from below 600 million to 851 million in a couple minutes.

It's easy to blame this on end of the month trading, but it happened on Friday as well.

The modest rise (20 points) in the Dow in the last few minutes was enough to put the Dow in positive territory for the month, keeping up a 7-month win streak.

Regardless. The mood was sour all day. After several weeks of choppy economic data (including today's weak Chicago and Dallas PMI) traders are now facing the prospects of even more anemic growth ... and expectations were not very high to begin with.

"Look at it this way," one trader wrote to me. "You had the BEST weather possible and the Fed kept the spigot open and the best we can do is 2.2 percent headline GDP growth?" And—as several pointed out to me—strip out the inventory build last quarter and it was just 1.6 percent growth.

"And what do you think will happen if the U.S. government gets really aggressive cutting spending, which is supposed to happen in the second half of this year?" That is about 25 percent of GDP right now.

And what about Europe? Fund managers like decoupling (the idea that the U.S. can outperform the rest of the world, and be reflected in our relative stock performance), but the trading community does not seem to be buying it.

I get hate mail on this. "The US and EZ [eurozone] correlate around 85% of the time and the EZ is NOT muddling through but sinking into recession," one trader wrote. "And if the US and EZ correlate 85% of the time and they are in recession what odds does that leave us over the next 9 months?"

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