Monday, October 8, 2007

Earnings on Deck

Investors took a respite on Monday. They really did. For perspective, the Dow traded in a range of only 40 points, so there really wasn't anything to get excited about. It's part inertia and part waiting game - waiting for 3rd quarter earnings reports to begin flowing later this week.

The markets have been in such convulsion, first from the sub-rime mortgage malaise and the related tight credit conditions, then, the August jobs report that showed a loss of 4,000 jobs prompting the Fed into a 1/2-point cut in the Federal funds rate.
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And now, with the release of the September jobs data and upward revision of August to a gain of 89,000 jobs, there's a sense of apprehension and wonder as to whether the Fed moves were actually necessary.

Personally, I think the question to be asked is, "how reliable are government statistics?"

Frankly, I don't believe the August job revisions and I think there are others out there - though it's difficult to locate anyone of that opinion - who are in the same mindset.

Regardless, the markets are in horrible condition. Today's trading was simply another manifestation in a loss of confidence. Investors feel cheated, that the markets are rigged to benefit only the major players. And even some of the major players are unhappy. It's really depressing. Maybe a spate of honest earnings reports will put more perspective on where we stand.

Dow 14,043.73 -22.28; NASDAQ 2,787.37 +7.05; S&P 500 1,552.58 -5.01; NYSE Composite 10,186.43 -61.50

Declining issues held a somewhat surprising 5-3 edge over advancers. On the other side of the equation, new highs stood at 329 to a mere 99 new lows.

Perhaps the most surprising action of this Columbus Day - a curious half-holiday - was in commodities. Oil fell $2.20, to $79.02. Hallelujah! Gold fell $8.50 to $738.70. Silver dropped 13 cents to $13.36. Strange, indeed.

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