This is The Wall Street Digest Hotline Update for Tuesday, May 13, 2008, at 6:00 p.m. EST.
Stock prices closed well off the lows of the day. At the closing bell, the Dow fell 44 points, closing at 12,832, while the Nasdaq gained 6 points, closing at 2,495. Oil closed $1.62 higher at $125.85 per barrel, and gold closed $18.50 lower at $866.40 an ounce.
Retail sales fell 0.2 percent in April. However, excluding auto sales, retail sales rose 0.5 percent last month. April import prices rose 1.8 percent month-over-month; April export prices rose 0.3 percent.
First quarter home prices fell 7.7 percent year-over-year. Home sales are still falling, with little hope of a bottom in 2008. Meanwhile, corporate profits are above expectations. $7.2 trillion cash is on the sidelines waiting for the stock market to move above the 200-day moving average. The yield curve is steep and bullish for the economy and the stock market. Stay fully invested!
Do not sell any of our food, seed, agriculture or fertilizer stocks and ETFs. One billion people are starving due to the worst global food shortage in history. Be sure to own Potash Corp. of Saskatchewan, Inc. (POT).
Let's continue to avoid the housing sector. I would not purchase residential nor commercial real estate. I still do not expect the housing market to bottom in 2008.
Stay close to our Tuesday/Friday Hotline Updates. I will be adjusting our portfolio of recommendations to capture maximum profits from a stock market rally.
The next Hotline Update will be on Friday, May 16, 2008, at 6:00 p.m. EST.