Wednesday, July 6, 2011

Market Struggles for Gains; Gold, Silver Continue Higher

US equity markets are, in a word, blah.

They struggled on low volume for a second consecutive day to find smallish gains, with nothing much to go on other than the Challenger, Gray and Christmas report on planned layoffs, which came out prior to the market open.

The report showed that planned job cuts were up by 5.3% as compared to June, 2010, another sign that the US job market is weak and may be deteriorating further.

With the ADP private employment report pushed back to Thursday, that's all investors, speculators and traders had to go on, which really wasn't much, but still managed to pull out gains in all but the NYSE Composite.

Things should get a bit more interesting in upcoming days and weeks, as first, the ADP report comes out prior to the market opening Thursday, then the big one, the BLS non-farm payroll survey on Friday. Following the weekend, it's straight into 2nd quarter earnings reports, kicked off by Alcoa (AA) following the close on Monday, July 11.

Of course, nobody wants to talk much about the stalemate in Washington over the debt ceiling. Republicans have tied it to a demand for deep budget cuts and no new taxes, while the Democrats seek to salvage their favorite hand-out, er, entitlement programs, financing them with an increase in taxes on top wage earners and the elimination of some tax loopholes.

These issues will remain in focus until somebody blinks, and it appears that everybody in the nation's capitol have their eyes wide shut whilst the nation careens into another recession, or, at best, an era of slow to no growth. Naturally, neither side will admit that the bigger issues of Medicare and Social Security need to be dealt with now, rather than later, but the usual posturing on both sides will almost certainly prevent any substantive discussions on what's eventually going to bankrupt the country.

Nonetheless, traders trudged on to moderate gains on Tuesday.

Dow 12,626.02, +56.15 (0.45%)
NASDAQ 2,834.02, +8.25 (0.29%)
S&P 500 1,339.22, +1.34 (0.10%)
NYSE Composite 8,396.48, -8.15 (0.10%)

Advancing issues led decliners, 3464-2920. On the NASDAQ, new highs led new lows, 143-28, and the same setup appeared on the NYSE, with new highs ahead, 159-12, putting the combined total at an unworldly 202-40. Volume, again, was very, very, excruciatingly weak.

NASDAQ Volume 1,602,326,250
NYSE Volume 3,613,122,000

Oil shed 24 cents on the NYMEX futures market, to $96.65, but the precious metals were where the action was for the second straight session. Gold finished $16.50 higher, at $1,529.20, while silver tacked on 51 cents, to $35.92. Seems there are people out there still who haven't bought into the whole "recovery" story we've been spoon-fed since Spring of 2009.

That's about all there is to know, that it's dreadfully slow, consumers are avoiding both shopping and stocks, and it's the middle of Summer. Head for the beach.

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