This week saw another disappointment in the markets, with each index down about 1.5%.  Traders reacted poorly to news on Thursday of a decline in manufacturing data a  fear there might be more job losses than expected Friday, challenging some hopes of a speedier recovery.   On Friday, the fears were realized, as the jobs reported indicated 551,000 initial jobless claims, up 17,000 from last week, and significantly higher than the expected 535,000.  The quarter still ended strong, however, despite this week’s numbers.  This week’s slide may be a recognition by the markets that the recovery might still take some time, and the losses are a correction of previous high hopes.

Next week, we look to initial claims to see if this week’s dip can be corrected.  Also, we will be looking at wholesale inventory numbers.  Until now, much of the recovery can be attributed to restocking of inventories.  The numbers next Thursday will give some insight into the status of these inventories- if there is some natural demand returning there, it would suggest some movement toward recovery.