With ongoing grateful thanks to the Wall Street Journal for kindly providing such a neat summary, and so – for Saturday October 31st 2009 – here’s what was hot during the past week, and what……wasn’t;
From the monthly archives:
October 2009
This is to wish a close friend of mine a very Happy Birthday today.
Where some say; “I will be true to the way”
He says; “I’ll redesign the way 20 times, and be true to that”
“Whoa”, says I, “that has to be immortalized in print somewhere”, and so it came to be on Dogshit, that the perfect opportunity arose to cast those words in Google Stone. Anyway, back to the narrative….
Now under normal circumstances, what does one do on one’s birthday?
Well, eat is usually on everyone’s list….
First? we recommend the excellent hors d’oeuvres
Next? dinner sounds like a reasonable choice!
Followed by…..cake (yes, quite)
Anything else you can think of, that almost everyone does on their birthday?
Yes that’s right…….consuming a jug of fine ale with good friends. SO then, hopefully there will be an abundance of this:
and (hopefully) none of this:
and after such a day of celebration, we definitely hope an enjoyable day doesn’t end like this:
We see some signs of a tired market, and the distinct possibility that this rally may now finally be slowing down. This was clearly displayed on Wednesday afternoon, when a downgrade of Wells Fargo – in itself a bit surprising perhaps, but definitely not a major event – brought gains to an end and caused all indices to plunge. The ease with which the market broke, however, suggested that investors knew they was operating on borrowed time, trying to climb a wall of worry while staring at $81 a barrel oil, digesting word of government mandated pay cuts for select companies receiving bailout funds, and realizing that the 1,100 mark for the S&P 500 proved to be another tough nut to crack earlier that day.
Strong earnings from Microsoft and Amazon on Friday weren’t enough to help the stock market which instead focused on negative news from two of the nation’s railroads. Union Pacific and Burlington Northern warned that freight demand, whether consumer or industrial, is still weak. The Dow Transports, often considered a leading indicator for the Dow Industrials, fell very sharply, down 3.5%.
A huge jump in existing home sales did very little for the stock market. The jump is tied to government stimulus in the sector, namely first-time buyer credits, but the report also showed further declines in home prices, a big negative that hurts the consumer. The dollar benefited from a big slide in the pound following a surprise drop in U.K. GDP. The dollar index rose 0.5 percent ending at 75.50. But the dollar is still just below the key $1.5000 level against the euro. Oil backed down slightly to end at $80 with gold very steady at $1,055.
The three monitored indices all got pounded on Friday. The S&P 500 led the downhill slide, shedding 1.22% to close at 1079.60. Next in line for the down ramp was the Dow, that slid 1.08%, closing at 9972.18. The NASDAQ was off 0.5%, ending a disappointing session at 2154.47.
Looking ahead to this week; Third quarter earnings results and economic data, particularly the Advance reading for third quarter GDP on Thursday (10/29), will be in focus. There is also another potential catalyst as the calendar is full of Treasury auctions – 5-year TIPS reopening Monday (10/26), $44 billion in 2-year Notes Tuesday (10/27), $41 billion in 5-year Notes Wednesday (10/28) and $31 billion in 7-year Notes Thursday.
Have a profitable day and week everyone!
With ongoing grateful thanks to the Wall Street Journal for kindly providing such a neat summary, and so – for Saturday October 24th 2009 – here’s what was hot during the past week, and what……wasn’t;
The bears came out of their caves yesterday afternoon….
Equities had been showing weakness ahead of the opening bell yesterday, but jumped out to a strong gain in early going. The S&P 500 even made its way to a near 1% gain so that – briefly – set a fractionally new high for 2009. Financials underpinned the markets’ early advances, with strong earnings by both Morgan Stanley and US Bancorp. Hoever financials rolled over in late trade and settled with a 1.9% loss as pressure intensified against Wells Fargo, which was hit with a mid-session downgrade by widely-followed analyst Dick Bove. He and others were unimpressed with Wells Fargo’s report, despite the fact that it contained better than expected earnings. Go figure.
As financials fell under a strong wave of selling pressure, the broader market also buckled. An aggressive selling effort in the final hour took the market from a solid gain into a not inconsiderable loss. Even energy stocks couldn’t hold their gains into the close. The sector overcame an early loss of almost 0.9% to climb to a gain of almost 2% before falling back to a 0.2% loss at the closing bell. Energy stocks had been helped by higher oil prices, which reached new 2009 highs around the $82 per barrel mark following the latest oil inventory data. Crude oil inventories increased 1.31 million barrels, which is below the 1.5 million barrel build that had been expected. Gasoline inventories had a draw of 2.21 million barrels, which is larger than the draw of 850,000 barrels that was widely expected. Oil closed at $81.36 – and here we go again with the see-saw of oil pricing pressure discussions.
Earnings news overall was mixed, but the Really Big News was a horrible and completely unexpected loss by Boeing, which continues to suffer from costs associated with prior production delays. Reporting a jaw-dropping $1.5 billion loss, the Dreamliner builder managed to miss EPS targets, and drastically lowered its forward guidance for 2009 earnings. Sour resuts indeed, but as Jeff Macke observed;
The upside? That Dreamliner is going to be cool, as soon as Boeing’s engineers learn how to keep the wings on it.
Deepening weakness in the dollar is heightening talk that policy makers are pursuing a deliberate, thinly masked devaluation policy to raise inflation in a move to monetize the government’s debt. This talk has been going on all year in the commodities markets but is now appearing in broader research including yesterday from Morgan Stanley which said there is “the possibility that central banks might want to engineer controlled inflation to reduce the public debt burden.” Until an exit strategy is announced, traders are saying that foreign investors will seek to protect themselves with non-dollar assets and that the markets will taunt the Fed by selling dollars and buying commodities.
The dollar index fell a steep 0.7% to 74.99 with the dollar testing the key $1.500 level against the euro, a break of which may, according to traders, trigger intervention from the ECB. Gold led commodity gains earlier in the month and, pressured by profit-taking, was unable to make much ground, ending only $5 higher at $1,060, itself an utterly absurd level unless you consider the “surrounding environment”.
The three monitored indces all took a beating on the day. The Dow recorded a sharp slide of 0.92% to close at 9949.36. The S&P 500, despite toying briefly with 2009 highs intra session, ended down 0.89% at 1081.40. The NASDAQ slid 0.59% to end the session at 2150.73.
Looking forward to today; Watch for Chinese reaction to the jump in oil prices, and also whether the European Central Bank responds to the dollar breaking the $1.50 barrier, with intervention measures, though frankly, I doubt it. Other significant markers for the day are weekly initial and continuing jobless claims, for signs of overall improvement.
Have a profitable day everyone!
From the incredible people at Frontline comes an hour long retrospective which aired last night on PBS. It examines who the players were in the 1990′s and 2000′s, what their attitude to regulation was, and how lax (or complete lack of) regulation created a bubble and one helluva bust.
If you watch no other documentary this year, watch this one
Equities had a decent outing after a slightly rocky start yesterday. Early weakness in financials caused undercut the broader market’s opening gains causing an opening dip, but it didn’t take market participants long to see past that weakness, and bid stocks higher. Trading volume was unimpressive at the NYSE, where barely 1 billion shares changed hands. Recent averages show 1.2 billion as a more or less baseline figure these days. The Dow closed over the latest “myth & magic” 10,000, while the S&P 500 took a run at 1,100, but failed to close at or above that number.
Low interest rates in the US versus expectations for rising rates in other economies hurt the dollar, with the dollar index falling 0.4% to 75.20. Anther factor which inevitably contributed to the decline was new data from the New York Fed confirming that it has tested reverse repurchase agreements to prepare for when policymakers decide that they should be used. Although the NYFed disclaimer stated that the tests were; “a matter of prudent advance planning by the Federal Reserve, and no inference should be drawn about the timing of monetary policy tightening” nevertheless, that was enough for some currency traders to exit the greenback.
And then there’s Forex……
[click to continue reading this post…]
The much loved 77 floor Chrysler Building at 42nd & Lex, which for one year (1930 – 1931) was the tallest building in the world before the Empire State Building was completed. This is a magnificent perspective on a Great Depression era building. Click on the image to view a 3408 x 2837 (much larger) version.
Wednesday Morning Market Commentary 2009-10-28
by dionysus on 2009/10/28
Yesterday’s session can be summed up in one phrase; “profit taking”.
The Dow was able to net a modest gain as Exxon Mobil and Chevron shared in strength stemming from a better-than-expected earnings report from BP. On the tech side, IBM also provided leadership to blue chips by announcing that it has authorized $5.0 billion for stock repurchases, which not only help improve earnings per share results by reducing the number of outstanding shares, but also sends a signal to investors that strong companies are now willing to fund buybacks, rather than stash cash into their coffers amid economic tumult.
Despite IBM’s strength, many large-cap tech issues traded as laggards following downside guidance from Internet search engine Baidu.com. Collective weakness among large-cap tech caused the Nasdaq to underperform the other headline indices.
Shares of consumer discretionary stocks were among the worst performers this session, though. They dropped 1.7% as retailers recoiled following a disappointing Consumer Confidence Index reading of 47.7 for October. The consensus had called for a reading of 53.5. The Conference Board says consumers aren’t paying attention to inventory restocking and aren’t putting too much weight in one-time stimulus efforts. Instead they’re worried about their jobs. The Conference Board’s consumer confidence report moved decidedly backwards this month as more, the most since 1983, say jobs are currently hard to get. I’m sure you, like me, find that hard to believe.
Aside from visible profit taking, the disappointing consumer confidence data weighed on the wider market. In balancing good news the dollar index firmed for the second straight day, up 0.2% at 76.20.
The three monitored indices had a mixed day. The Dow crept ahead 0.14%, to close at 9882.17. NASDAQ was the biggest loser on the day, pulling back 1.20% to close at 2116.09. The S&P drifted, losing 0.33% to end the session at 1063.41.
Looking forward to today; eyes will be on Durable Goods Orders (08:30), in which a gain would underscore an emerging view of recovery for the manufacturing sector, and revive jaded investor spirits. New Home Sales (10:00) is expected to follow on a favorable August trend, and provide some froth for trader’s capuccino’s.
Have a profitable day everyone!
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