Stocks Mixed info Final Hour, Consolidating This Week's Gains

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Retail longs, Telecom longs and Medical longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is mixed as the advance/decline line is about even, sector performance is mixed and volume is above average. Average Hourly Earnings (year over year) rose a very strong 4.1% in February vs. estimates of a 4.0% gain and an upwardly revised 4.1% increase in January. This is almost double the most recent CPI (year over year) reading of 2.1%. Moreover, the 10-month moving average of Average Hourly Earnings (year over year) increases is 4.05%. The only year during the entire 1990s expansion that exceeded this rate was 1998 at 4.2%. Combine this with yesterday's report, which as I predicted was almost completely ignored in the press, that Americans' household net worth hit another all-time high during the fourth quarter, and the consumer is in much better shape than is portrayed in many circles. Oil is falling $1.60/bbl., to session lows right now. I expect a convincing break back into the $50s next week. The energy sector is only coming under mild pressure so far. My intraday gauge of investor angst is at above-average levels once again. The yield on the 10-year is 7 basis points higher, which I view as a big positive as traders see the chances of a recession diminishing. I do not believe that stocks need a rate cut to rise substantially from current levels. I expect US stocks to trade mixed-to-higher into the close from current levels on more economic optimism, short-covering and bargain hunting.