Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.
Friday ushered in another bizarre case of economic data falling short of expectations; yet, it was a positive for the U.S. investor. Ultimately, it helped push the S&P 500 (INDEXSP:.INX) to a gain for the eighth time in its past nine sessions.
Today’s economic data was a mix of somber to poor across the board. The Michigan Consumer Sentiment Index tumbled to 76.8 for September compared to forecasts which had called for a reading around 82. This would mark a sharp decline from the 82.1 reported in August, and could signal a changing attitude among consumers who are seeing signs of weakness in the economy. U.S. retail sales growth in August of 0.2% also lagged estimates, and would confirm the consumer sentiment figures’ suspicion that the consumer is more anxious that he or she was last month.
On the bright side, weak retail sales figures, and a worried consumer, could give the Federal Reserve a reason to hold off on tapering its monthly bond-buying program known as QE3. This free money program is largely credited with helping keep interest rates near record lows, and in buoying the housing industry — and, frankly, investors would love to see it remain in place.
With that being said, the S&P 500 advanced by 4.57 points (0.27%), to close at 1,687.99, less than 22 points away from setting another new all-time closing high.
Leading the pack, yet again, is video game and gaming accessories chain GameStop Corp. (NYSE:GME), which added 6.1% on the day despite no company-specific news. No company over the past year has topped the S&P 500 in gains more than GameStop Corp. (NYSE:GME), which has been pushed higher in anticipation of robust sales with the coming debut of Microsoft‘s Xbox One and Sony‘s PlayStation 4. Furthermore, the debut of Madden NFL’s 25th anniversary game for the current gaming consoles is bound to pump up investor optimism. As for me, I remain concerned that this could be a “buy the rumor, sell the news” type of event. GameStop Corp. (NYSE:GME) is certain to see increased sales for the time being with the debut of new gaming consoles, but its share price has already risen dramatically, and the lag time between next-generation console development is incredibly long. In other words, a year from now, GameStop Corp. (NYSE:GME) shareholders could be very disappointed with their company facing some steep same-store sales comparisons.