Economic activity was good this week, although you wouldn't know it by market behavior. Equity investors blew off the strong upward revision to real GDP growth for the second quarter and discounted another spurt in home sales. Even the NAPM-Chicago, revealing continued strength in the manufacturing sector, was largely ignored.
It could very well be the case that financial market investors have fully anticipated marked signs of recovery and are discounting them now that they are here. Job worries may also be keeping enthusiasm down as the recovery won't continue unless labor market conditions improve - and that remains a sore point in this recovery.